The Wii U may not be a cutting edge powerhouse, but it's definitely capable of producing beautiful visuals; after all, the PS3 and 360 produced some absolute stunners with half as much RAM and older GPUs.
The thing is that nobody's trying.
Nintendo's priority clearly isn't on pushing visual boundaries. Even the 1st party who pushed the Wii's limits, like Tokyo EAD and Retro, seem content to do Wii-graphics-in-HD on Wii U. And third parties? They're barely bothering to do ports at all.
The thing is, graphics are about more than just the hardware.
Games like Uncharted 2-3, The Last of Us, and God of War Ascension look as good as they do because they were built by teams of technically brilliant people for whom pushing technological boundaries was a very high proirity. Wii U simply doesn't have any such studios.