I'd believe this more if the past few generations weren't filled to the brim with so much Kanto-pandering that even the newest generation of Pokémon were overshadowed by it...
Firstly: this does not address the issue. If I wanted to transfer up my Battle Tower team but one or even two of the three Pokémon aren't available in SwSh, suddenly my entire team synergy is ruined. Maybe that second or third partner will be available in gen 10, but by the time that comes out they may finally give my first team member a break and not have it available. What if I want to breed for a shiny Blitzle, but it's not in the Galar regional dex just as it wasn't in the regional dex of any game since gen 5? All Pokémon should be in every game.
Secondly: some Pokémon haven't been in a regional dex outside of their region of origin, and with all the focus gen 1 will inevitably get, I doubt they will put any extra effort into ensuring every Pokémon gets their chance eventually. If I remember correctly, Masuda claimed he didn't want to remake gen 3, but did so because of fan demand. But if fan demand is no longer enough to entice them to do things--for them to patch in the ability to transfer Pokémon after release--I doubt we will ever see gen 4 or 5 remakes to give the niche favorites of those regions their chance to see the light of day.
Thirdly: Game Freak clearly doesn't care about long-term benefits for Pokémon. They drop every potential long-term improvement with each passing game--Contests, Secret Bases, Battle Frontier, Poké Star Studios, PWT, Megas, Z-Moves, Pokémon following you, soon to be photography and Dynamaxing. We nearly lost character customization for crying out loud. So if Game Freak doesn't care about thinking ahead two or three games from now and what those games will feature, why should we the players? Maybe I will be able to use my competitive team of favorites seven years down the road, but why should I care after all that time?
Needless to say, I am not a fan of this statement.
What you said. Yes.
Only thing is, I really can't see them cancelling the games over this. I think they're too stubborn to do that. It really just seems they attempted to solve the problem and their attempt really did nothing. But really like you said, their real only solution would be to cancel the games and start all over. But I think they still realize they will still sell enough games from devoted enough fans to make money from it, but then again I've seen people threatening to cancel their preorders over this, which is absurd and childish if you ask me.
Not stubborn, real. We're talking about multiple companies in multiple countries and multiple billions of dollars. Canceling the game or even delaying it is never going to happen. It's ridiculous to even think about it.
I can't understand why you believe canceling preorders is "absurd and childish"? If the games lack the series feature that you expected, expected so reliably that you preordered after a very limited reveal, why would any reasonable person still be pledging their money in advance, details unknown? If the most significant information you have is that the company has become comfortable taking away a feature you never even questioned was their highest priority, why would you still have so much faith as to blindly agree to buy their product? How are you seeing "absurd and childish" here?
They are not going to cancel anything. They are not going to delay anything. They are not going to DO anything. Nothing will change, the games will come out as they are and we are the ones who will be dealing with all of this.
The only hope for me is that there are enough fans talking about it, who remain serious about not buying the games or merchandise, and the damage to sales is significant enough to actually motivate change.
If it sells well anyway, Game Freak will have learned that Pokémon fans will give them money no matter what. There is no incentive to do anything after that. And they will have created a new automatic hype engine: "What's that you say? Gen 9+ looks like crap? Oh, but [insert previously cut favorite Pokémon here] is in it this time? Well, Game Freak, I guess ya got me! Ha ha!"
All they have to do is recycle forever. People arguing that this is about freeing Game Freak up to do more innovation aren't really listening to the reasons Game Freak is giving or looking carefully at the technical proficiency on display in what we've seen from Sword/Shield.
If enough people really don't buy these games, there is a chance they will release patches or a third version with a full Pokédex. Sales would have to take a dramatic hit, though, and I'm not sure the Pokémon fanbase has either the stomach or the organizational commitment to make that happen. Most likely, this message is really not only about the Dexit issue, but every conceivable fan grievance with Pokémon, no matter how essential or how widespread it is:
"Fan input is neither effective nor desirable. Please stop. You will buy our games. You will buy our merchandise. You will subscribe to our services. We are busy counting money and laughing at how vocally outraged you are about planning to give us even more of your money. We know this, so just shut up and hand it over. Thank you. End of line."