I just discovered this site called Pokecheck & it is absolutely frightening to see how common this is. Like the vast majority of recorded Pokemon are hacked with perfect 31 IV's & hidden powers to cover their weaknesses flawlessly.
How could Nintendo let it get this bad?
It doesn't matter what Nintendo does or doesn't do, it is literally impossible to prevent cheating. In a multiplayer game, it is somewhat possible to achieve it is by having significant amount of game logic as well as the save games be handled by a server as seen in most online games.
There is always-online DRM for single player games but it is neither fail-safe nor is it practical for a handheld game, not to mention that it is a defective-by-design concept in the first place.