I actually think you're quite wrong.

My NVIDIA Shield Android TV box is Tegra based, and it drives 4k games pretty darn decent. It's no PS4 but I don't need that (and PS4 can't do 4k games) and you don't need that to run good (non-VR) games. And Nintendo is apparently using their own custom Tegra SoC so it's likely a step above the couple year old Tegra that is in the Shield.

Also the promo video shows Skyrim being played on it. Whether it's real footage or not, I don't know, but it doesn't look bad at all, and requires some decent GPU heft.

And if they're smart about this the switch to an ARM SoC means they'll be able to iterate more quickly and produce new higher spec'd or cheaper models to follow up and keep market, like they should have done with the Wii.

Thanks for sharing. Maybe my perception of what mobile-sized hardware can do is out-of-date.