Porting the engines if no one else is going to, and no one else will if the creator of the engine won't do it, is a great idea. Hell, it's pretty much a requirement. If Nintendo isn't willing to do that, they're pretty much doing jack **** nothing to attract third party support and if Nintendo doesn't care, I won't either and they can just ride off into irrelevance with their heads up their asses.
This Nintendo-games-only routine was a huge FUCKUP on the N64, not what should be the standard expectation of a Nintendo console. Though I figure if Nintendo actually gave a **** about it they would have fixed it by now. If you have the best selling console of a generation but have the WORST third party support you either have no idea how to get other companies to support your system or you just don't care.