This is without a doubt a very sensible choice.
Intelligent Systems is an incredibly talented bunch, able to do something Nintendo is struggling with at the moment: putting out medium to high quality games at a high frequency.
They have roughly the sames manpower as Retro Studios, but are putting out more than four times as many games, without even counting their DSi games.
Their only problem is that their core titles don't sell. The DS Advance Wars averaged less than 500k, and the DS, GC and Wii Fire Emblems sold just as bad. WarioWare saw a dramatic drop in sales toward the end of the DS, largely because the microgame genre is becoming crowded by free smartphone games. It's just not the series it was anymore.
Before the 3DS, Fire Emblem had been in decline since 2003, Advance Wars in decline since it started, and Warioware was starting to die as well. Paper Mario was doing well, but that was their only series doing well.
It's clear Nintendo told them to shift their course. Fire Emblem - Intelligent Systems' golden series - was to be cancelled if Fire Emblem 13 didn't sell well (source: http://serenesforest.net/forums/index.php?showtopic=40303&page=1). Warioware became a download only series, and downscaled somewhat. Intelligent Systems started making a lot of DSi games, and then 2 3DS e-shop games (Crashmo and Pushmo, both highly successful).
Intelligent Systems changed course somewhere around 2010. They either had to manage to make their series popular again (which they did with Fire Emblem), or abandon them in favour of making new IPs.
Music games are usually somewhat risky. They either sell very well, or next to nothing. If an Intelligent Systems game doesn't sell a lot, it's really not at all a problem, because IS is incredibly effective, and nearly none of their games do.
If one of Nintendo's other studios makes a game and it does poorly, that's far more workpower down the drain.
Mnementh said:
How much dev-resources has Intelligent?
Intelligent Systems is perfectly capable of making many games at once - more so than any other Nintendo studio.
They made 3 games on the Gamecube (Paper Mario and the thousand year doll, Fire Emblem 9 and co-developed a Wario-ware game. Meanwhile, they put out 7 games on the GBA (Fire Emblem 6, 7, 8. Advance Wars 1 & 2, Mario Kart: Super Circuit, and a Wario-ware game.
Then, they made 3 Wii games (Fire Emblem 10, Super Paper Mario and a Wario-ware game), while also making 9 DS games (Fire Emblem 11&12, Advance Wars 3&4, 3 Wario-ware games, Planet Puzzle League and Dragon Quest Wars.
That's not counting the Japan-only games (except for the two Fire Emblems which weren't released internationally), their two Wiiware games and a lot of DSi shop games.