I think I understand why Nintendo heavily protects their IP. Their strategy dates back to when Nintendo first expanded into the US in the 1980s after the video game crash of 1983 (which partially happened because of the overwhelming amount of low quality games being produced then)[1]. They deeply care about quality and being associated with it. When they launched the NES, they heavily filtered 3rd party studios and created the "Golden Seal of Approval" for all of their licensed games. Their strategy works. People trust Nintendo to give them high quality entertainment. They even went as far as designing the NES box to look like a VCR appliance, not a video game console, all because of the negative association people had after the VG crash!
So expanding from that, they (rightfully, from a business culture perspective) don't want their IP being tampered with, nor associated with a product they themselves did not create. Nintendo probably spends a much higher percentage on R&D than the average video game company. They don't want all their efforts to be watered down from mimicry. They don't want someone to see Mario in a meme post on YouTube and associate Mario with that video. They want Mario to equate to the production quality they work really hard to produce again and again.
You're wrong about Nintendo being hated. People love them, because they trust Nintendo. And Nintendo in turn works extremely hard at building and maintaining that trust.
[1]https://en.wikipedia.org/wiki/Video_game_crash_of_1983
