Nintendo is a capitalist corporation aiming to maximizing profit, and not anything else. Maximizing profit is the true end of Nintendo, and that may be done by several strategies. Maximizing the consumer well-being (i.e. being ''nice'') generally is what we hope they do, but it is not necessarily the most able to profit = profitable thing to make.
Nintendo perhaps actually thinks it is horrible that random people will spoil their IP or threaten their sales:
- Spoil their IP → making mods of their games can spoil Mario, Pokémon etc as the child-friendly characters they are, not to mention water down the novelty of a new game, if for instance there would be a ''new'' 2D Mario or pokémon every 6 months (if they released the tools and did not persecute). Or even being straight better received than the official games, which is already the case with several pokémon fans going after hacked ROMs because they hate the current generation's gameplay etc.
- Threaten Sales (main one)→ If fans and the community extend the life of older hardware and games, then the people will consume less new games and even less switches, and it directly replaces their current cloud retro gaming offerings (it is so barebones that anyone could make a better experience of NES SNES etc by just installing an emulator and downloading ROMS, make that automated and Nintendo-aproved retro gaming is over).
Nintendo therefore has a hostile draconian, anti-fans anti community anti ecological and even anti consumer strategy to maximize sales. The fact that there is still people working on stuff on this environment is only due to the strong love the fandom has. I wish they could dedicate this craft to FOSS games, where their contribution would be respected and celebrated.