Switch didn't hold back the PS4 gen, and Switch 2 won't hold back the PS5 and eventually PS6 gens. I feel like this is the device that eats away at Nintendo's market share and provides a longer lifecycle for titles while the AAA audience continues following the power train. You expect mobile/handhelds to be lower power - it's why the series S approach to this problem never worked.
Switch was so different it’s basically a different device. Games were ported, not built in parallel.
If Sony keeps ps4 specs alive, devs will keep targeting that and simply scaling up. Less than optimal situation, and even worse than a Series S.
I feel like both arguments are valid:
With a "portable PS4", there is already a huge library available AND newer games can target it, too. Not all games are demanding enough to have to "drop" last-gen specs, especially if you think about indies or lower budget games.
On the other hand, the concerns regarding such a type of portable holding back games are also valid (and I share them), as greed often prevails and execs/shareholders might mandate for new games to support the platform, especially if it's a successful one.
We already have pubs like Activision and EA reluctant to give up on the past gen revenue with their yearly franchises.
The needle of the balance, IMHO, would be Sony. Will they support the platform with lower budget, but still high quality exclusive PS4/PS5 games (like Sackboy, for example), to give the platform some kind of identity, without gimping down all of their PS5 games (which could still be played via remote, like the Portal)?