Game Pass on Sony and Nintendo consoles is what Microsoft wants. Both would be insane to allow that to happen. Microsoft strives for a business model where they can move on from the restraints of selling dedicated hardware and simply sell a service.
Nintendo will probably fall before Sony ever does because Nintendo only accepts things one way.
Go back and look at Microsoft 2 decades ago and look at them today. It's almost a completely different company with a different business model. The greats that reach the top understand that you have to be adaptable to change what you do. The companies that reach the top and fight to keep their legacy business model in place go extinct.
Up until almost very recently Nintendo has had their business model protected by technology constraints. Lately and going forward that might not be the case. People are less and less attached to buying media directly and less and less inclined to buy a propriety media box.
The selling people a dedicated console and games that lock them to that box days are going to come to an end. Will Nintendo accept that?
100% agree on Nintendo having dinosaur policies. The only real reason they are allowed to get away with it is
1) Those legacy IPs print money ridiculously
2) They are a monopoly on the handheld console front that isn't stopping anytime soon