That would be a mistake on Nintendo's part and I doubt they would be that foolish. Consumer confidence isn't something that can simply be glossed over. The hit they would take to their credibility would be massive and the negative media response would be brutal, especially following the success of the Wii.
The important part here is that Nintendo not suffer losses. If they can continue to make a profit, no matter how modest, then they will soldier on with the Wii U, even if it never takes off. Investors might not like it but the bottom line is still the most crucial point. The 3DS, in effect, is the Wii U's saving grace.
However, I think there is a deeper issue here with regard to Nintendo's future in the home console market. Will they continue to be a company that gambles on hardware innovations/gimmicks while playing it safe with software? I believe that operating model will result in more misses than hits--though the hits might be massive. The runaway success of the Wii seems to have pushed them down that path with promises of easy millions but the world of fads and trends is not that easy to judge.
When it comes to the software, the truth is that Nintendo's narrow focus will keep them in a niche market unless they have third-party support to fill the gap genres. Nintendo home consoles, unless they score that big hardware hit, will probably have a lower baseline that the Xbox or Playstation brands, as they typically offer less variety. That might just be something Nintendo, and Nintendo fans, will have to learn to deal with. There is nothing wrong with being niche as long as you're making a profit.
