If you take Miyamoto's words the right way, I'm assuming the next console they release will likely be on par with what Sony will likley do. You got to remember, Nintendo at one point had the most powerful hardware on the market, then switched to a lower power, cheaper console and dominated still. 

Although my belief is that the next generational gap will be smaller than the current jump. You can only make a game look so good. You'll notice it with Nintendo, but you wont notice with Sony or Microsoft. Thus the law of diminishing returns effects gaming. 

Wii U/ 3DS bundle. Come with Mario Kart 8 and Smash Bros for 3DS.
$559.99
Holiday mega bundle sale of 2014.

Why won't you notice it with Sony/MS? They'll hit a brick wall too. 

Sales have been decling in the past several months because no games of note have been released in the past several months.  Your list does not contain anything recent.  Again, games, games, games.  They have to keep coming.

Look how good games look now. Without going completely realistic (which no one really wants), there is only going to be slight changes with Sony and MS. NIntendo though in 4 or 5 years if they have some uber powerful console you'll see a huge difference between the Wii U and NIntendo Fusion Plaform. People said the same thing when jumping from the PS3 to PS4. It's pretty much a PS3 game with more detail and a better frame rate. 

We have hit a graphical bar where we don't have the time, money or ability to create machines that surpass that level. Until the technology is invented that puts an entire server farm on a chip for graphical processing we wont get anything better than what we are currently getting. Besides it's bad for design if you are overwhelming the user with crap on screen

There isn't much to do; I've said all along that the product itself is the problem in the Wii U's case and that smart devices and browser and social games are stealing customers from dedicated handhelds.
Every week of sales drives the point more home it seems; I remember people practically mocking me in 2011/2012 when I suggested that dedicated handhelds would suffer greatly under smart devices and my skepticism towards the Wii U has been out in the open since E3 2012 and even before, especially the Gamepad.

The Wii U was quite simply flawed as a concept from the get-go, that is nothing that software can fix and the 3DS is facing the onslaught of the biggest phenomenon in consumer electronics and personal devices in history; look at the Vita that was designed more like a smart device but lacking many of the key functionality, it has been absolutely murdered.

I see no reason to change my outlook on things, some may know of my posts in the UNITY thread where this is discussed at length and in depth, nothing has changed since then.

It's an issue with the complimentary products: games in this scenario.

Why spend $99 on dedicated gaming hardware when games normally cost $40?
Why spend $199 on a tablet that can do more and where games normally go for $0?

See? The market isn't placing value on the hardware, it's placing value on the games. And, it's becoming more and more apparent that it doesn't want games for more than $5.

Yeah its not a great time for Nintendo. I don't think they can do more than what they're doing now.

Release smash on both consoles ;)

its funny when people say wait for holidays, the fact that we have to wait for holidays to see decent sales just proves the OP's point