I think any scenario where the Wii U wasn't a huge upgrade over the PS3/360 hardware wise or didn't have the most revolutionary controller of the last 30 years (like the Wii did) was doomed to struggle no matter what.
Everyone has a PS3/360, they don't want another one.
If the Wii was another PS2/GCN/XBox level hardware but didn't have such a revolutionary controller, it would've flopped too.
If you are going to go the whole "lower tech + but with new innovative control input!", the controller has to be so spectacular that it brings in a whole new audience. No ifs, ands, or buts.
When the R&D department couldn't come up with anything more interesting than basically a regular controller with touch screen in the middle of it, Nintendo should've gone back to the drawing board with the hardware chipset and maybe asked AMD to give them something like a customized off-the-shelf PC GPU that was more powerful.
