It's wild to me that even just the API would be so controlled. Is it not enough that they control signing of the software? Does this not shoot them in the foot when it comes to courting developers?
Layman here, but IIUC it's the exact opposite. Nintendo in particular had massive problems with crapware and knockoff devs adopting the traditional 70s/80s PC game distribution paradigms, if you know what I mean. It was difficult to tell what was a genuine, high-quality purchase. Locking down development is apparently one of the reasons they won out over Atari. We're in a different world today, but 2/3rds of the major console market is Japanese, and the business culture there is supposedly very cautious about reapproaching things that have burnt the company in the past.
That explains why they locked their platforms down, but it doesn't explain why they need to do that at the API level. They already totally control the storefronts and all software run on a console must be signed by them. That should be enough to prevent the Atari situation on its own.
The companies hold the gates to millions and millions of potential buyers. Indies want to sell in all of them and there is no other way for them to do so.
In addition, consider that most indies use Unity/UE, which already support the consoles, so vendors couldn't compete on ease of development even if they wanted.
If Godot was overwhelmingly used by indies, then yes, you could be right.
Most indies already use Unity, which has support for all consoles. Most indies don't even know a single native API call. Unless the game needs something very special, they just use Unity API for everything.