Your argument is correct for some of the S2 Edition games (especially for Prime 4) - but not for ALL of them. I think we can highly agree that the biggest seller of this holiday season will be Pokemon Legends - and I think this game will not look / perform much better as a S2 Edition and its improvements will be very small. So for the big mass market audience, there is still some missing S2 seller for this holiday season, thats why I think that Nintendo should provide at least another title for the end of the year.
There are people will upgrade to Switch 2, to play games like Prime 4 or Pokemon Legends in the best possible version. This by definition makes them system sellers. If anything the difference with Pokemon is bigger because steady/fluid framerate and high resolution isnt a thing on Switch, while Prime 4 will still be among the best performing games on Switch 1.
System sellers dont have to be exclusives, they just have to offer enough advantages on said system to convince people to want to upgrade. Is GTA VI is gonna sell PS5 Pro consoles despite it being on other systems as well, same way DQ XII will sell Switch 2 hardware in Japan even it might be on PS5 or even the Switch 1.
The amount of money customers can spent is limited and Switch 2 owners dont exist in a different bubble than everyone else. Most Switch 2 owners will treat ZA as big Holiday release, in addition Age of Imprisonment, EA FC, CoD, Elden Ring etc. releasing on the Switch 2 for the first time.
I think you are vastly overestimating the amount of purchasing power of regular customers in 2025 and the amount of software Nintendo needs to provide for the system to sell out. Its gonna be counter productive to multiple expensive game within a short frame, when a lot of indies and 3rdParty partners have been targeting this Holiday season as well.
Finally and more importantly, MK World is still gonna be the main system seller for the system for the foreseeable future. Assuming the bundle is still around, thats what people who upgrade to Switch 2 will hope to get Day 1.