Wii U won't be considered 'up there' with PS4 and X1 even though it's a more than capable machine. But if anything, it's playstation in front with Nintendo/ Xbox miles behind, next gen is already like that.

Also I call it next gen until releases for the current generation mostly dry up. For now, we are in transition as many new releases are still for 7th and 8th generation. Not 8th only

I think Nintendo just assumed with the changing mobile/handheld markets a small incremental increase for a home console would usher in a bigger transition. I dont think Dev's were ready, if Wii U launched alongside PS4/One i honestly think the perception would have been different and it would have had more dev support not to mention beefier hardware.

It was just sort of introduced too early and no one knew quite what to do, both consumers and devs and its just hard to rebrand in light of public perception.

Wii U is Nintendos next gen (or new gen) but it's only slghitly stronger then the PS3 which mean that the players who want the best possible version of the mainstream games like Call of Duty and FIFA, they will get a PS4.