I think that there are 2 kind of problems, with Nintendo on FPSs. 1st. Most of their development teams are from japan and FPS isn't not very big part of their gaming culture so I think that actually jap developers don't know and understand the key values of FPS enough to be competitive. 2nd. It's the AI...it's a very important aspect of FPS and, while Nintendo focuses very much into creating fun game machanics and good level design, in the AI departement I haven't seen big changes from the N64 era (that's one of thier biggest limits imo), if you think at it even in games like zelda or metroid prime enemies are very mechanical, their behavior is not really affected by the player actions, neither I've seen games where enemies cooperate against you.