The project got big enough to show up on their radar. At that point it becomes a “protect it or lose it” thing, and Nintendo, being Nintendo, opted to release the hounds. It’s partially related to the ROM takedowns - Nintendo is cashing in on peoples’ nostalgia (or would that be “NEStalgia”?) by re-selling them ROM images of games they likely already owned in the past in the form of the virtual console or the “Classic” series of micro-consoles. If people can get those ROMs for free and potentially sideload them onto the devices, Nintendo is out the money those consumers would have spent to buy the “NES Classic 2”, with 20 different games from the first one. So, they once again release the hounds on any potential source of the ROM images in existence, playing whack-a-mole with the Internet. Fortunately, the Internet never forgets, so there will always be somewhere out there to get a full set of Nintendo’s stuff. It’s just a matter of how dedicated you are to finding it. 
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It would not be hard for Nintendo to make even a paid service offering access to all the old games on Switch, Wii U and even the 3DS… they could charge a reasonable fee and people would pay it. The way emulators work shows just how easy it would be. Instead they want to release a handful of games on Virtual Console for ridiculous prices and toss a couple games onto “retro” mini consoles.
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