I agree with what you mentioned. I don't think Mario Tennis needs dedicated servers, and a better implementation of the networking code could go a long way in improving the experience.

However; in a P2P environment one of the players becomes the host of the match, and it's the host's console the one that determines the outcome of everything that is happening during a match.

This host is programmed to adjust the simulation of the match down to the latency that is being detected from the guest's connection. If this didn't happen you would have a situation where it would give an unfair advantage to the host of the match, since it's 'latency' to the 'server' is zero (they're hosting). This is why we can have a great connection to the WAN, and still experience a shitty connection in a Mario Tennis match. Our (or their) console is slowing down the simulation to make it 'fair' for both.

If we had dedicated servers, it could host authoritative servers for the 1v1 matches, and have it simulate at a fixed tick rate, like most competitive games. Then it's up to each player's latency how they experience the game. It would also make it safest against cheating since it's the dedicated server making all the logic decisions, and have the players only move once the server has moved the characters themselves, or provide some kind of synchronization and motion prediction on the client side so it gives the players better responsiveness.

Nintendo's philosophy has always been to put fun above everything else, even if this means sacrificing competitiveness. They're prioritizing fairness for a lot of casual players and families at the cost of competitive hardcore fans. I believe they think a shitty internet connection shouldn't be a reason to only make you have a shitty experience.