I would be fine if they just stuck with the name and replaced the SKUs over time. Release a new model every other year or so and let people upgrade who want the latest. The scaling capabilities of the Switch could allow this to occur seamlessly until they pull a Microsoft and release an "X" version that then cuts off the older models from newer high-end games. People understand this with Apple and Android products. Some newer software only runs on a newer OS/phone model.
Those old systems would go out into the market (potentially to siblings and friends of the original owner who don't own a system) and this could create more Switch users over time to buy more software.
I feel if you do this there effectively aren't consoles anymore. There is just a series of software platforms. Consoles were supposed to be the easy approach to videogames - you buy the system and everything released for that system works 100% with the same experience for everybody. It has blurred with the PS4 Pro, Xbox One X, DSi, and New 3DS. This setup where at one point new games run poorly on your system or not at all and you're pushed towards buying a new model but without any clear distinction between generations introduces the hassles of PC gaming that made it less accessible.
I feel this makes Nintendo and Sony direct competitors with Apple. If their platform lacks the distinctiveness of a console then I don't see how the general public makes the distinction. Apple has games too, plus other software that is not game related. Nintendo's game focus may make them the choice for gaming or it could have the negative effect of their platform just coming across as lacking features since it probably won't have the extra bells and whistles. The less of a console these things are the less reason there is for all of these similar computers to co-exist in the market.
I think Nintendo would do best if they stuck with the console approach in contrast with everyone else so that they're the straightforward games company, designing hardware specifically for games and using the console model that is easy to understand, particularly for families who don't want to have to buy their kids a new console every two years for minor improvements. Nintendo did the New 3DS to try to get people to double-dip, which isn't very nice, but they do not demonstrate any particular need to improve hardware to tweak frame rates. They've exclusively used outdated hardware for 14 years now. Updating the hardware every five or six years like normal fits their approach to game design.