Honestly, that kind of makes sense given the era the NES came out in. There was a fair amount of unplayable shovelware for the Atari, so having some oversight was probably good marketing at the time.

The practice of going after emulators and trying to establish exclusive rights to game mechanics that they didn't actually invent is a bit further.

Lifetime of goodwill I believe the quote is. The OP is right on that too. I don't know how old you are, but there's a certain generation that allocates Nintendo an exceptional personal worth and views them as an exceptional company, due to the long standing memories that are associated with their products. Mainly the NES/Super NES era, but they had a few waves. It's not really brainwashing, it's literally like 20 or so years of memories with products that were key during crucial moments of our lives. So yeah, it's a bit hard to reconcile that with the way they are acting in our modern age, honestly.