I think the question is not whether to release Steam Deck 2 because of Nintendo Switch 2. But rather whether to realease Steam Deck 2 at all.

Releasing your own hardware is an expensive and risky endeavour. Licensing Operating System that allows to play games with better performance is on the other hand nearly risk-free, and benefical for both Valve and a hardware manufacturer.

Other manufacturers are already providing competitive hardware, all they need is to include SteamOS on their devices, and they can technically release a second generation of Steam Deck.

Really don't know why people are comparing a console to a PC just because they're handhelds. They are different platforms. Steam Deck isn't part of the console wars.