Because what you're calling "great choices," I call necessary choices. Without the price drop in 2011 and the re-model in 2012, the system wouldn't have taken off. Games helped, certainly, but it was those two business decisions that carried the day, and Nintendo paid a hefty toll for that price drop.
Yet at this point, Nintendo is both unable and unwilling to do the same things. They CANNOT drop the price without losing face, even if they could possibly afford to absorb the losses involved in that decision. And there are no obvious or well-worn criticisms of the console itself to be fixed in a re-model. Without a shift in the hardware element, they are not going to be able to maintain sales long-term, certainly not enough to reach their sales targets unless those change.
As for why the Vita is still in the game, it's because Sony is stubborn, and they've committed their prestige to it. In essence, they're in the same position Nintendo will be in with the Wii U if they don't turn things around or lower their expectations.
I believe in honesty, civility, generosity, practicality, and impartiality.
