I decided to read through the write-in sections of 64Dream after the 64DD's launch to get the pulse of the DD's userbase at that moment. It's really interesting!

#N64
#64DD

The impression I get was that the adult N64 userbase was - much like elsewhere - defensive diehard Nintendo fans who bought the console on the premise that its games would be able to do things that no other console could, before or even maybe after.

Through that lens, a letter like this makes a lot of sense, despite being (Unfortunately) very wrong in retrospect.

Don't get me wrong, I WISH that we kept getting 64DD software even after the GC launch, but the gaming landscape would have needed to be so radically different in order for that to be feasible, both with Nintendo's internal strategy as well as the actions of Sony and Sega. In the world we live in, the N64 was dropped like a rock several months before the GC launched, and you can count the number of post-GC N64 carts on one hand.

The Company Nintendo Hired to Boost the 64DD, Right At Launch:

"Yeah we know it's a failure before it even hit the market, we meant to do that, actually"

It's really shocking to see a gaming company abandon their new hardware IMMEDIATELY at launch. Like, Miyamoto himself saying "hope you're liking the 64DD! All our upcoming games for it have moved to other platforms :)"
Earlier in the interview, they asked about the future of the 64DD, and Miyamoto immediately pivoted to talking about the upcoming Mobile Adapter GB by saying like, "Aw sorry, it started out as an excuse to use Randnet, and we just sorta made games from there. Please go buy our NEW online service that hasn't flopped quite yet instead!"