No, people associate Sega with garbage.
How is Sega affordable? For comparisons sake, Rare cost Microsoft $375 million. Sega is a much larger company.
You're assuming that Nintendo would release most, if not all, of Sega's titles already in development. This is the same Nintendo that scraps entire completed/near-completed games (i.e. Miyamoto's "upending the tea table") such as Star Fox 2, the same Nintendo that halted development on Too Human so Silicon Knights could focus squarely on Eternal Darkness, and the same Nintendo that canceled all of Retro Studios projects except Metroid Prime then changed the direction of the entire game. Seems to me, considering Sega's penchant for releasing mediocre games, Nintendo would probably restart development or flat-out can most, if not all, of Sega's titles.
Nurturing a new dev is more in line with what Nintendo does (i.e. Retro). It's a safer bet and has worked out for them before. Nintendo could purchase Sega from Sammy and release a bunch of sh*t games to recoup some of their losses, but that wouldn't help them restore confidence in the Sega brand. It just makes it that much more difficult. See, I'm not saying that Nintendo couldn't pull it off. In fact, Nintendo is probably the only company that could because they're so shrewd when it comes to quality. However, I find partnerships like the one that's bringing us The Last Story as far more beneficial. Now, that game could end up being crap, but it's a smaller investment that brings us a brand new IP. Even if the experiment fails, Nintendo doesn't lose too much.