Nintendo has missed the mark before. The N64 and Gamecube both ended up losing in the market, despite Nintendo having said "magic" that you claim. And having less horsepower is NOT a plus. Having enough, and the right price point can be though. The XBox ONE, for example, is more expensive and less powerful than the PS4.
But there is a question with the Wii U whether or not it has enough horsepower, or the second screen is enough of a differentiator. As it is now, the second screen isn't appealing enough to people, not is it for me. Heck, I tried and tried and tried the second screen a number of times in demo units in stores, and see almost NO compelling reason to get a Wii U. It just doesn't do anything for me. I thought it might, but it just didn't. The Wii was a different animal, and looked like fun to me actually, as it did a lot of other people, the Wii U doesn't. Heck, even the said 3D differentiator of the 3DS isn't really that much interest to other people at all. The 3D ended up a gimmick. The price point is why the 3DS sells, and it doing some nice other incremental updates. The Vita blows it on price actually. And the Wii U, if it was that desirable, the MAIN feature of the second screen, it would be selling well now, and it is not. It is struggling, along with the Vita. And, the second screen better be a selling feature. It is the main differentiator Nintendo has, and it has to work, the way motion control did.
The horsepower comes in, in regards to getting the next generation content. if Bethesda doesn't feel the Wii U is worth the time, you don't get it. You don't get EA other. Ubisoft isn't doing any next gen stuff on the Wii U. The Wii U is a late to the market current gen system, with a second screen. It has 4 times less RAM than its competitors, and other inferior spects. It follows the same path the ONE gets bashed for with its memory, and has less.
The thing you have BIG issues with, and your argument regarding power not mattering is that it can also mean THIS generation consoles get additional life to them.
And on the horsepower front, Android is coming on, at a lower price point. And that is where the casuals went, onto portable devices, playing games as secondary features of their other devices.
I would have to say here also, you are missing the big picture. The entire videogame industry could crash, pulling a version of the 1980s. You could end up having the Wii U selling more, BUT the market shrinks. Companies all bleed ink and and least one company leaves. Nintendo hangs on, grabbing a larger piece of a marketspace that is getting smaller. Congrats, you win, but it doesn't matter. The future of gaming goes Android, and you are doomed personally. Guess what, that is more likely to happen than Nintendo dominating at home again.