Some random thoughts on the Masuda Snap from me too:
First of all, I can sort of see where they are coming from. Content pile-up in Pokémon has been a problem for a while. There are tons of Legendaries whose story significance expired several generations ago, signature moves kept in the code for Pokémon that almost never see use, obscure mechanics related to gimmick moves few people even know about, Incenses, Berries, Plates, Mega Stones, Z-Crystals and form(e) changers out the wazoo, in addition to more Pokémon than you can realistically cram into one region, postgame included. It was clear that sooner or later, they would come to a point where the old content pile would become too overburdening, and some say it has really been a thing since Gen VI or so.
However, Game Freak's approach to this problem has been pretty sloppy. Although recent generations have added fewer Pokémon to the 'dex presumably in an effort to slow down the pile-up, they still haven't done much about the core issue. For instance, look at 'mons like Silvally or Oricorio, whom Game Freak casually designed around the concept of using multiple items that were completely useless beyond their association to that one specific Pokémon. The attitude seems to have been "who cares about the next games, let's make things that are fun in this game and throw them on the pile for a later day". If they only realize now that the pile has become too big to handle, that's mostly their own fault, with the insistence on creating new mechanics all the time instead of reusing old ones.
So yeah, it was always clear that something had to be done. If not now, then soon. But the line of thought about the handling of the pile seems just as sloppy as the line that led to it in the first place. Taking out half of it and saying "We won't bother implementing all that" is not a good solution. Because up 'till now, they have always owned their problems, taking responsibility for all the content in the pile for every generation. This creates a certain level of expectation and trust the fans now see as broken, hence the backlash. Every Pokémon is somebody's favourite, after all. It's also great fun to try out non-regional Pokémon in a playthrough, and see how differently they work in the game from the ones the designers meant to give you. That won't be possible anymore, and I understand that people are bummed out by it. I am too.
That all being said, what could they have done? As I said, something would have to happen. And I think Home would be a good answer. Were it up to me, I'd have added a ton of functionality to it. For instance, a Battle Whatever, move tutors, trading, link battles, minigames, the works. I'd have made Home the Pokémon Stadium successor some people have called for. Not just a storage box you can put Pokémon into but not withdraw them from, but a game in its own right. I'd also make it the official platform for VGC. Players would happily buy it and pay the subscription fee. They would also have tolerated that things would be missing from the core series games, as Home would be the "series core" if you like.
Another solution would be to revise things, trimming the fat without amputating. Change evolution methods so all Pokémon evolve by plain level up, Evolution Stones or trade. Do all forme changes through interaction with the same object. Drastically reduce the number of signature moves. Have one Z-Crystal and one Mega Stone. Simply make it less of a hassle to implement old stuff in new games. However, the loss of uniqueness might be hard to swallow, making the game have a wide but shallow pool of content. With all the unique aspects stripped away, a whole lot of Pokémon would begin to look all to much like a whole other lot of Pokémon.
I guess they could also have done business as usual for one more generation, just to give the old design philosophy a final swan song on console. The Switch could handle it just fine, since the 3DS did it with a fraction of the computing power. Then they could have tempered fan expectations a little with a more carefully managed PR process, or found a solution that would keep players somewhat happy with the new order instead of suddenly taking a dump on their carefully built-up expectations during an interview like this.
