Why does Nintendo lock digital games to the console the game was originally purchased on, rather than linking them to the customer's account?
This is industry standard by now, not just in the gaming world as shown by Playstation and Xbox, but with many types of intellectual property, including e-books. Amazon and Sony don't limit your download to one single device. If I buy a book, I can enjoy it on both my iPhone and my Kindle. If I buy a Playstation download, I can install it on the console in my bedroom and on the one in my living room. With Nintendo digital downloads, however, you get none of the benefits of digital downloads, yet all of the drawbacks. If your console breaks, is stolen, or if you just decide to sell the console to get a new one - well, you can kiss goodbye to all your games, because they belong to the console's serial number, NOT your Nintendo account. You can whine to Nintendo's customer service all you want - they won't help.
Sure, Nintendo does offer a gimmicky "system transfer" up to five times IF both consoles are present and working, but as it stands, nothing about their download process is redeemable. On top of the famously low processing powers in their consoles compared to their competitors, this is one more example of Nintendo refusing to enter modernity.
Nintendo apparently fears that all customers worldwide would quickly unite under one account, resulting in each game being sold only one time. Some people tend to agree with these overblown claims, asking what's to stop an individual from sharing his account with all of his friends. Credit card information, that's what: most of these accounts have credit card numbers attached to them, and handing out passwords like candy is tantamount to passing out copies of one's credit card. That's why iTunes is still is business, because people don't want to fund their friends' purchases of shitty music and games.
The price of most Virtual Console games are comparable to albums and apps in the iTunes store; that iTunes, with its generous download policies, has yet to go broke shows that Nintendo probably would probably not face severe revenue losses if it implemented a reasonable account system. That they still refuse to do so shows a blatant disregard for their customers.
Regardless, pirates, I'm sure, have already circumvented Nintendo's copyright protection measures. As with most schemes of the sort (like licensing), pirates are afforded at best a few months worth of hacking, then are free to disseminate and utilize cracked software. Meanwhile, paying customers are the ones left stuck navigating draconian restrictions that hamper legitimate uses, such as a hassle-free way to download purchased games onto additional consoles owned by the family.
I love Nintendo and I love their games (my Club Nintendo account testifies to the thousands I've spent on their products), but I just can't justify this policy.