Also I'm not saying this is a console that replaces the Wii U.

It's not "ermaghad! New console meanz Wii U iz dead, new console means old console is deaderz, it's teh Saturn Segaaaaa!".

Think of it more like widening the Wii U audience if anything, it would be another console that could play Wii U software. So it would be more like a third pillar if you will. Broadening the reach of Nintendo Wii U software, not narrowing it by offering an option for upmarket consumers. If anything it could extend the life of Wii U software development at least on Nintendo's side.

The basic Wii U would be free to service consumers looking for a lower cost option and families/entry level consumers, the newer model could find itself cashing in on disgruntled Sony/MS fans who feel the new consoles are under-speced and don't like perhaps some of the DRM policies (cough *MS* cough) as well as keeping Nintendo fans who are tempted by other platforms because they need their third party fix from fleeing.

If this holiday season fails to set things off I really think it would be wise for Nintendo to consider this. I know a lot of Nintendo fans don't want to admit it but the Wii U is doing horrible and it's longterm prospects have never been in its own favor. It's quite clear that Nintendo wanted it to take off at launch just like the Wii so they could churn a profit before the (probable) 2015+ years of the generation, which would be when the other two consoles should start to distance itself from the Wii U's capabilities. There goes what little third party support it is getting. I mean, why would they water down their games to port it to the Wii U when they didn't for the much higher selling Wii?

I might sound like a usual anti-Nintendo goon but I assure you I care just as much about them just as much if not more than most. Lets just admit that if Super Mario 3D World doesn't sell truckloads like we all want it to and fails to create a substantial increase in sales for the console that it is pretty much over. Nintendo is outgunned in terms of power and the consumers, while certainly not in a bad standing with the company, just aren't buying into their shtick this time around.

I don't care what they do, but it needs to be different than what they are doing now. VERY different.

The thing is I'm not advocating killing the Wii U at all. This strengthens the Wii U IMO by giving it two outlets for its software.

The core Wii U could still aim at families, budget gamers, kids, the Japanese market etc.

The new higher end console would have the same exact Nintendo games as the Wii U, but just with a selection of PC ports from third parties.

It would basically be a Nintendo system (New-age NES/SNES) made specifically for the Western market, whereas the current Wii U is really made in a lot of ways for the Japanese market IMO (small size, super low power consumption, low cost for families, etc.).

If the vanilla Wii U sells 30 million consoles, and lets say this "New Nintendo Entertainment System" adds another 30-35 million ... suddenly that's a fairly respectable userbase of 65 million households that can go out and purchase a game like Mario Kart 8. If they both go north of 40 mill, then suddenly Nintendo's turned a generation that was looking like a big retreat into a 80-90 million userbase for their own games and multiple options for third parties (easy/cheap PC porting or making a lower cost Wii U game at its base which can also play on the New NES in 1080p or higher to gain access to a wide variety of consumers). 

It's good for third parties and good for Nintendo too. 

Nobody wants to invest $300+ on a new console from a single console-maker every 2-3 years. That does NOT need to change. 5+ is perfectly acceptable, and is in fact a desirable time span. Also, as far as Wii U is concerned, it IS "two generational" in that it is 100% backwards compatible with all games and almost all accessories for the Wii. The only next gen console to offer that.