Simple. There are three major problems:
First, terrible marketing (including the name).
Second, no internally developed 1st party games for a full seven months after launch. Inexcusable.
Third, and most importantly, no system selling launch game that proved the concept. Seriously, even the Wii would've had trouble selling the motion concept without Wii Sports at launch. When I can come up with better uses for gameplay with the gamepad than Nintendo has thus far, one has to wonder why the hell they'd champion this design.
Without these three critical detriments, things like "modest" power or being a bit pricey wouldn't have mattered.







