I just read the article (didn't need to before) and there's a few things to consider. First it's IGN, it's hardly the gospel. 2nd of all, I looked at the pics and said "mock ups" before reading the article which barely mentions that's true.
3rd, the "500" number on the games would be more likely to be true than the buy/rent prices they mention. Nobody is buying these old games for $20 no matter how rare they are because unless nintendo gets VERY anal with user-registration, I wouldn't want to buy games and hope they last forever on a console's flash RAM or HD or whatever they're using. The rent fee would be ok but 14.99 a month is a bit steep.
Anyone who really wants to play old-school zelda that badly is already doing it for free so I don't know what nintendo is thinking here...