3DS is still $150 so if you look at it that way, this is an easy upgrade.
Not only that, 3DS released at $250, and then the big ambassador price drop put it at $180... And that's just $20 less than the Switch Lite. And Nintendo was likely losing money on the 3DS at that price vs. likely breaking even on Switch Lite.
I think this is going to do gangbusters in Japan, especially when they start putting out more "special" consoles like they always do.
As much as I would try, not sure I could resist an Animal Crossing one if the design is tasteful...
The Switch soc already has usb-c on it so it's weird to remove the docking feature of it. I assume it still uses that to charge?
It uses it for charging but the Switch dock itself has some kind of hardware DRM/special sauce to make video output work, so they took the lazy route of not even bothering to integrate that stuff into the main unit...