Well, plausibility and probability, I dunno. I did however briefly draft up a scenario for a map competition that never came to fruition though that was sort of similar to this. It has Sweden losing Gothenburg and eventually Småland most of Westrogothia to Denmark, and this forces Sweden to be more or less locked into the Baltic, as the Danes also retain Scania, Hallandia, Bahusia and Blechingia. Focus is instead upon the East, and the Vasas make much better use of political instability in Russia to push easterwards unto Lake Onega and the White Sea. For various administrative reasons during a prolonged war and several Riksdag already having been held in Finland (there only ever was one Swedish Riksdag taking place in Finland in OTL), the capital is eventually moved to Turku/Åbo. Swedish still remains as the official administrative language, but by the 20th century, Finnish is actually the language spoken by most Swedes.
The idea was going to be that Sweden ends up losing increasingly more of Sweden proper to Norway-Denmark, so that by modern-day, Sweden is essentially a big Finland that holds Estonia, Latvia, parts of western Russia and Northern and western Sweden. Even though Finnish culture really is dominant in Sweden in this timeline, Finns don't think of themselves as having a distinct national identity separate from the Swedish as Finns really make up the overwhelming majority of the Swedes in this timeline.