Sometimes I've wondered whether Nintendo should have waited an extra year and create a more powerful console, but in retrospect, I think those thoughts were a bit foolish. I think it's important to remember that despite Nintendo entering the eighth generation first, they're also the last to enter the HD and extensive online gaming markets. I imagine that Nintendo needed to make the move quickly, since the longer they stayed out of those markets, the harder it would be to join them.
For example, I recall articles where Miyamoto admitted that they had initial difficulty transitioning from SD to HD development, which in turn may have delayed their early software releases. Additionally, Nintendo has had to work on convincing HD and online gaming consumers that the Wii U is a worthy competitor in those spaces, which may be difficult due to Xbox Live and PSN membership loyalty (If Sony and Microsoft can somehow create a way for their users to not lose all of their digital libraries they've collected for their 360s and PS3s, I imagine there could be a stronger amount of loyalty for those consumers into the next generation).
Even if Nintendo did decide to wait (or ditch the Gamepad) to create a stronger console, we can't forget that Sony and Microsoft could have responded by creating more powerful consoles anyway.
Ultimately, I think that Nintendo's biggest problem wasn't the Wii U's hardware, but the position they were in by being the last to enter the HD and online gaming markets. While their choice to go SD helped Nintendo put out the Wii at a competitive price and surpass the 360 and PS3, I think it had consequences for the upcoming generation. Regardless, once more software gets out, I think the Wii U will do a lot better. I don't think it will do nearly as well as the Wii, but I love my Gamecube, and I wouldn't mind if the Wii U had a similar amount of success.
