That sucks. I remember when I first got the WaveBird for my GC, I was able to go outside my house and it still worked. I guess there would be too much lag if Nintendo tried to make the reception go any farther... don't forget that the game isn't actually running on the controller, your inputs get sent to the console, which is busy sending both the inputs and video back to the controller.

Fans can only speculate how far a signal will reach.   Just because fans speculate doesn't mean that's what is going to happen.

Actually, yes, this can and likely will be done.  Broadcom and Nintendo developed this special version of Wi-Fi Miracast together to achieve the super low latency and reach that it has but also so that extenders could easily increase the range in the future.

Nintendo has also been repeatedly saying that 25 feet is the safest estimate that they can give for the Wii U connection, and that it also really really depends on the configuration of your house.
If you can't even get 25 feet though, that's a big shame. :/

Then why I've kept reading in reviews that the you can go very far from the console with the controller and still play flawlessly? I'm confused

I'm assuming that reviewers are playing the Wii U in the office and not in their homes, where they might have more stuff in the way. 
And also the OP is trying to do two different floors, and usually floors are at least 8 or so inches thick, so that can't be great for the connection.

I live in a townhouse which is more vertical than a single family home and I was able to play the gamepad through the entire house except one portion, it varies depending on your house size

well i hope no one lives in a big ass house and plans to move around, cause it would be hard

Well that is very short distance. I guess Nintendo does not want this controller to compete with their handheld.

Check my post above.   The signal can be extended.   The signal protocol being used is designed for it.   They've not spoken about it yet but I'm sure they will at some point.  In fact, all routers with Miracast included should, in theory, be capable of extending the range.

I don't really see the huge attraction in being able to play off the TV, I want to play on a large screen! Otherwise I would be playing on my Vita

Having said that, it does seem a bit of a shame that you can't play it throughout the house, though the 24 feet that I have seen quoted does seem reasonable even if it doesn't work that well through walls