This especially comes as a surprise, because Nintendo had announced that they would be giving fans a game for free for one month before they would have to choose to buy it or lose the game. Fans were very upset about this pretty much across the board, and it is a surprise to be sure, but a welcome one to see Nintendo actually listening to what their fans want. They said they would go into detail more later, but we know that at least some of the games will have added features like online play.
We don't know how many games will be available for the service, but right now we know that there will at least be Dr. Mario, Super Mario Bros. 3, and Balloon Fight. Nintendo also has not announced whether or not this service will be replacing the virtual console altogether, or just working in tandem with it.
Instead of one subscription for your console, it will be for each Nintendo account. So if you have multiple accounts on your Switch you will each need to have the service to use online capabilities. This doesn't roll out until 2018 though, so you still have some time to mess around online without any subscription. It's also still about a third the price of the Playstation of Xbox online subscription.