Gimped hardware (mini-DVD, downspecced last second, less RAM than competitors) and Nintendo's "kiddie" image hanging over from the 90s are likely the main culprits. Nintendo's immediate post-N64 design philosophy shifts (shorter, quicker, less polished) also hurt them game wise imo, leading to "disappointing" sequels for Mario, Zelda and Mario Kart. PS2's early and fast domination really kept any serious competitor from happening too, though Xbox had an advantage in it's PC friendlier spec (leading to several "console exclusives" like Morrowind, HL2 or KOTOR) combined with XBL being so progressive.
It's a shame as GameCube really had the best core architecture, and it was so rarely pushed. Had Nintendo gone competitive from day one and crafted a $299 loss taker (that wasn't purple and with a handle), we'd have probably gotten something similar to Wii spec back in 2001. An earlier investment in online infrastructure probably would've helped too, especially given the work they'd just sunk into radnet/64DD in Japan and I could've seen a service like Virtual Console really being a huge draw for them back in 2001/2002.
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