I think Nintendo has come to the conclusion that it doesn't want partnerships anymore. All of its close partnerships from the 90s have ended in a split (Rare, Angel, Left Field, Silicon Knights) or a buyout (Retro).
This has its ups and downs. I miss the freedom some of those second parties had and the new franchises they introduced. Without Rare, my N64 would have been pretty dull - Nintendo made great games, but they were so few and far between. Looking at Retro or NST, they make good games, but they tend to work on a limited, franchise-heavy lineup.
On the other hand, both Rare and Silicon Knights wanted to head down the path of big-budget theatrical games which wasn't what Nintendo wanted. Having seen the Wii, I'm convinced that Nintendo needs to be free to do what it wants, hardware-wise. I think the company's new method of teaming up with small developers for individual projects works, because it gives us great new games while leaving Nintendo free to follow its own path without painful "break ups". I was really disappointed when Rare's lineup went out the door. In practice, it didn't turn out to be a bad deal, but at the time I was crushed.