effectively, yes. This was a large part of why nintendo's online strategy was so poor for such a long time. The Switch is the first of their products where they specifically asked the younger employees to lay out what it should look like.
Friend codes were actually really neat; they managed to do interesting things in terms of casual online interaction (I still remember being blown away at video chatting with someone half-way across my country on DSi hardware (16MB RAM and ARM processors that weren't even capable of running Linux[1]), in a (first-ish party; Game Freak) video game where it wasn't even a sideshow it was such a small feature), they managed to do pretty painless interaction between your device and a PC in 2010, Flipnote Studio was a really innovative/impressive piece of social media in 2008 (more like Vine than Twitter, really, and first-party), etc.
Like sure, most of their uses of online prior to the Wii U or so were novelty uses, but they were still really well-executed, and at least early-on had a whole lot of genuinely interesting uses of it.
[1] I think there's a port of a very very old version of μClinux that kind of works on the system, so this is only partially true.
Only being half-snarky here, I only own a SNES and a GameBoy Advanced.
They introduced friend codes with either the original DS or the DS Lite, I believe.
Which, coincidentally, is why Wii and DS online no longer work; Nintendo never built a replacement service after GameSpy shut down in 2014.
Anything that requires specialized hardware to access the internet isn't ready for general consumption.
PSOepIII (episode III, not PSO III. It was actually PSO II) was an MMORPG; MMORPGs are aimed at a far different demographic than the group that the Wii was targeted at. Also, weren't PSO ep. I and ep. II released on the GameCube? Pretty sure they were.
"There were multiple companies in the 60s that had mainframes that didn't even work very well; are you telling me that your average family wouldn't be ready for computing back then?"
Focusing on internet connectivity on the Wii would have harmed the Wii, yes. The Wii had Wii Shop and a few titles that could interact online. Making it the core feature in many of them would harm the console, because not only would many people have difficulty setting it up, there were also significant portions of even the United States that were almost entirely decrepit of even moderately decent internet connections.
Not sure if it used the Internet, however.
If I remember right, which I might not, XBAND used the phone system but didn't use the internet.
Pretty sure it had a browser and a store.
Netplay on Nintendo consoles has been terrible. I admit that they did some interesting social things with the handheld consoles, Miis, and leaving comments (Mario Maker, Mario 3D World), but playing anything against another player was almost always terrible.
Smash Brothers has been one of their biggest competitive titles across many generations. Yet on the Nintendo Switch, the 5th iteration of Smash is still unplayable unless you're on a wired connection. Even then, you can still feel the lag in Smash more so than any other fighting game. Street Fighter 5 is notorious in the FGC (Fighting Game Community) for having terrible netcode. Yet I can still have high quality matches on a wireless connection.
You can't share digital games or DLC across accounts bound to the same consoles in a sane manner. Even if you specify that the accounts belong to the same family, it doesn't matter. Nintendo somehow made buying digital assets on a Switch more restrictive and a bigger headache than physical copies.
Don't get me wrong, there's some definite novelty in some of Nintendo's online offerings, but they are definitely stuck in the past.
For what it’s worth, I always play Smash Ultimate’s online on Wi-Fi (NAT type A) and practically never have problems with it. Though I guess the average player’s wireless connection might not be very good, and most players don’t use a wired connection as it requires an adapter.
I think for casual play like Mario Kart, Pokemon, etc, it worked fine. It absolutely hamstrung more complicated efforts like Smash, Metroid, and third parties were forced to all heavily build out their own infra or not build the feature at all.
These were problems that plagued much more powerful systems (Wii, 3DS - until very late in the lifespan of the console, Wii U, and even the Switch)
1. Trading phone numbers is easier than adding Friends on a switch
2. No voice chat service
3. No built in streaming
4. No game invite system