For that matter - why not sell N64-compatible consoles? You could make them incredibly cheaply now, and they're definitely still in demand. Are they scared of cannibalizing their "high end"?
Why do you think they would be cheap? Many of the relevant chips have been out of production for decades. Sure you can emulate a lot on a logic device like an FPGA, but those are still expensive compared to a microprocessor, and your engineering costs will go up. Then you’re facing stiff competition- a vintage gamers ideal is exact hardware. Any sort of emulation will have slight quirks- timing changes, mildly perceptible audio frequency shifts, etc. if your product isn’t an exact match for the hardware, it’s competing with the hundreds of ARM based emulation oriented systems that popped up after the RetroPi concept took off. And for what, a few thousands units of sales? Most people fall into “fine with emulation + ROM”. A select few stick with vintage hardware, which is not expensive. The market for “very close to original hardware but not quite” is a hard sell.
You're Nintendo, you have all the original specs, you can literally make an exact clone on an FPGA (or whatever's cheapest).
I don't disagree that the market is small, though. But Nintendo does have a chronic problem of under-manufacturing desirable hardware. Like, if you want a SNES Classic (good emulator, fantastic controllers), you'll have to pay 2-3x the original price. Nintendo could do another run of them every year for basically no effort, and they just...don't.
For the SNES classic, the limit on their production runs is probably the licensing of third-party content. They put blinders and only license titles up to a certain amount.
If you mean the Nintendo solution I think the [system] Mini trend has finally died out for good outside of a handfull of pathetic outliers like Amiga 500 mini. At any rate Nintendo seems to prefer to release these things on their existing consoles, as emulated roms, as it's cheaper anyway.
If you mean third party solutions I think there is at least one project that aims to be compatible with various original cartridges but its name eludes me at the moment.
[edit]
It's Polymega though it doesn't support N64 it does support SNES/Megadrive/NES/TG16 and a number of CD-ROM based consoles.
