This assumes that said company couldn't be as, or more, successful if they stopped making hardware.
But even if it did require a company to be worse off for it to happen, so what? Why would me or anyone else being selfish about the games they want to play be a bad thing? Nintendo is a company in business to make a profit, not a starving child that's having their sandwich snatched from them. We don't owe them anything.
And just for the record, so you don't misunderstand, I really couldn't care less if Nintendo went third party or not. They haven't made a game I really enjoyed that was the least bit original in more than a decade. If they'd like to make original titles that are as innovative and enjoyable as games like Super Mario Bros., Zelda, or Mario 64 were, they are welcome to court me again.