While I would enjoy being able to play Nintendo games on Microsoft hardware and Xbox Cloud Gaming, I think those benefits would be overshadowed by the negatives of a potential Nintendo that was part of Microsoft. Nintendo, for better and for worse, is willing to experiment. I don't see the Wii or the Switch coming out of a Nintendo made by Microsoft.
I'm frustrated by many things Nintendo struggles with, and I honestly think Microsoft could alleviate some of those issues, but overall I don't think Microsoft buying Nintendo would be a good thing.
I think this is the key concern with such an acquisition. Nintendo has been the MOST innovative in terms of hardware design. I think it's ironic and concerning that the release shows Phil Spencer thinking Nintendo is just about the IP and software, which misses a HUGE part of their success.
Nintendo brilliantly zigged when everyone else zagged in developing a cheaper Wii, but with perfect motion sensing controls. Sony, MS, PC gaming all focused on maxing out GPU capacity with virtually no innovation. MS did some with Kinect, but few players liked it and fewer developers utilized it. Nintendo designed the hardware and games that took advantage of their innovations brilliantly. Similar situations occurred with the Nintendo DS, then 3DS, and with the detachable Switch system, and still nothing new, just spec maxing from Sony and MS (unless you count Sony's touchpad on the top of their controllers and new trigger haptics).
IF (and only if) MS would give Nintendo team a full-powered star chamber seat for hardware design and selection, then I'd like to see it happen. This could be the key to innovative gaming hardware coming out of MS, benefiting from the superior MS hardware R&D teams (MS has great hardware R&D, they have terrible insight into what the market wants, which is precisely where Nintendo shines). Otherwise, I agree with Sean, that it would be bad for gaming innovation overall.
And just to caveat myself: I would not want MS to dump performance for a cheap system that appeals to the masses purely on price. I prefer 4k 60+fps HDR gaming. But there's no reason innovation and performance need to be mutually exclusive.