Nintendo's bad at continuity because they love formula and design. This isn't a negative aspect of their game development at all; the continuity between the three Prime games is unprecedented for a Nintendo franchise, probably because we Westerns (and Retro too) are obsessed with narrative. (Wind Waker was spectacularly weird for tying into OoT.)
Nintendo's choices with regards to narrative continuity are made after the game design has been put into place; the way you play Metroid is more important than why you play Metroid (though both are important). Same goes for Mario, Zelda, Pokemon, even the plot heavy Star Fox.
Personally, I like the idea of recycled plot and design. I personally wish every Zelda game was an experiment that created a new Hyrule from scratch (a la Wind Waker and Majora's Mask). Twilight Princess did an awesome job of that, but since exploring Hyrule is the crux of the Zelda games, Nintendo can't repeat that Hyrule and will either have Link go somewhere else or start over again. To me, that's the way it should be: none of these games should connect. Metroid is different, but we're still going through the same old motions every time we start a Metroid game - why not reboot the plot every time too? Star Fox (and Donkey Kong, and Metroid 1, and every frigging Nintendo game) has taught us that it doesn't matter if the plot in a video game is good, it just matters that there's a plot at all. Once again quoting Peter Greenaway: continuity is boring.