They are successfully competing with piracy, but not by being lower friction but by being more reliable and trustworthy.
Nintendo are highly focussed on a market where the person making the buying decision isn't the person playing the game.
Buy your 11-year-old son a Switch for Xmas and you know that a) it will work out of the box b) there will be a several family-friendly games with name recognition for any child that age (Mario, Pokemon, Zelda) and c) no one in his class will have a more expensive version or one that works better.
Contrast this with trying to get something to work on a PC with a 'switch emulator dongle'. You have to plug it in yourself, you will end up spending more than you planned in the computer store because each component comes with sucker upgrades, and game choices will be much wider and trickier. Then the game which looks great on your son's friend's machine will play like sh*t and you'll feel guilty for having cheaped out, without necessarily knowing what the operative constraint is.
Piracy can never be stopped and they waste a lot of effort trying.
They should optimize for being lower friction than privacy, like Steam.