It's ridiculous this is even an option. The dude has had one unsuccessful console so far out of four, and the other three that were successes were so popular that they shattered records.
Nintendo did mess up on the Wii U from the very beginning when they decided on the hardware design and name. There was no way that console was going to be as successful as the Wii from the start, and I think just about everybody knew that from the beginning except for him and Nintendo. Now that the console is out there is not much he can do except support it with good software, which he has been doing to an extent, and make a few refinements.
He needs to either throw money at third parties for some exclusives or buy more studios to create games that appeal to the western market.
The online infrastructure needs to be refined a bit more. Virtual console titles should either be released a lot quicker, especially the triple a titles, or the WIi library should be transferred over.
All first party games should make extensive use of the touchpad where it fits, nothing tacked on to show the capabilities that it has. It's not enough that you can offscreen play, which is the very concept that Iwata and Nintendo developed the Wii U on.
If he messes up again this poorly, then by all means he should resign. Messing up would be creating another console that neither revolutionizes games or doesn't appeal to the core market. Messing up is switching personnel to heavily focus on smart devices when the 3DS is doing fine.
So far he has one strike against him. But by all accounts, besides the Wii U debacle, he has shown undeniable intelligence that I feel very few men have when it not only comes Nintendo but gaming as a whole through interviews and investor meetings. You get a sense he really loves Nintendo, and to him it's much more than just business, a trait most CEOs lack.
Give him another shot. The Wii, DS, and 3DS success were all on him as well.