To be honest I didn't bother reading the blog post because I don't like this guy, almost always disagree with most of what he says and I don't want to contribute to his blog's hits. But to touch on some of the points you list in your OP:
One thing I do agree with wholeheartedly is on New Legend of Zelda. I, and many others, would love that.
Selling affordable hardware I can certainly get behind as well; instant profit is of course preferred, although I think something like WiiU where one game purchase turns profit is acceptable early on.
But as far as "profitability over innovation", isn't that what Nintendo ultimately achieved with the Gamecube? It sold for a minor loss at first, but Nintendo remained profitable throughout its life but didn't innovate with it... and it didn't sell well (much to my dismay). The focus should be on great games first, and combined with what I mentioned in my previous paragraph (affordable hardware, no heavy losses), profit will almost certainly follow.
"Abandoning non-game uses for the console" also goes out the window when you have something as diverse and multifaceted as the Gamepad. While I certainly don't want Nintendo to focus first and foremost on making their game system a multimedia hub, it would be foolish to ignore the fact that the Wii had the largest userbase for Netflix out of all the consoles - in mere SD quality, no less. Nintendo is on the right track with Nintendo TVii, IMO.
Other points such as smaller games > large games and not investing in polygonal 3D titles is just Malstrom's usual contempt for what he doesn't personally like, when I would argue that there is room for both without sacrificing either. The key, again, is GREAT GAMES, whether that be 2D Mario and Mario Kart or Mario Galaxy, Metroid Prime and Ocarina of Time. Nintendo should give us both, not only one kind all of the time.
