What happens when Nintendo launches a very successful and cheap console a few months before releasing the Switch hybrid console/handheld? Jose Otero:
Nintendo will discontinue the Nintendo Entertainment System: NES Classic Edition and the last shipments will go out to retailers throughout this month.
I bet that Nintendo looked at the Classic as a mistake. It was too cheap and attractive to players as a $60 machine that got hacked immediately to enable playing every NES game anyone ever wanted. The Classic also served as a distraction for buyers from the Switch and its inevitable virtual console online shop selling you the same 30 games at $6 or $10 a pop instead of about $2.
Nintendo has never done a good job with serving their old games up on their new consoles, why start now?