A hybrid will not happen as that shrinks Nintendo's market. With one device, they have to now compete against all consoles and handhelds and PC and phones/tablets. Sony has console and handheld. Microsoft has Xbox and PC. Nintendo is just to have one area?
How would offering one device that gives consumers the best of both worlds shrink Nintendo's market? There is a difference between choosing to shrink and re sizing your company to reflect on what you can actually deliver to the public.
If we look back on recent history, the big problem Nintendo faced with the Wii in 2009 was that they needed to start developing titles for the 3DS and the Wii U, which forced them to start cutting support on their current home console. It was really fun waiting on one last big Wii title and seeing games like Xenoblade not even be brought to the states without consumer outcry.
With the Wii U, they launched the console with only a handful games because they were not ready for the HD market, and of course, they were also making games for the 3DS! The Wii U is now starting to appeal to consumers with titles like Super Mario 3D World and Pikmin, but these should have been launch titles! Because Nintendo has stretched themselves too thin the console is one year behind on releases.