Who wrote this? AThe 3DS did so badly Nintendo had to take losses so it wouldn't fail. The 3DS is a disappointment sales wise. It should be at 100+ million. Nintendo focusing so hard on 3D is what caused such a big drop. If anything it shows that 3D will never be a big seller. It shows that even the mighty DS could not make it successful. Hopefully the idea stays in a radioactive dump where it belongs.
A. I wrote this.
B. Yes, Nintendo took a loss on hardware after launch, but returned to profitability with software and declining costs of the hardware down the road. Addressed in OP.
C. It would be difficult for any dedicated handheld only device to reach 100+ million in a market/climate that is already shrinking. To claim that the "3D" is what shrunk the market is ignorant of the impact that mobile phones have had on it. Addressed in OP.