If they can get the Wii U down to $199.99 by the time Mario Kart 8 launches they may have a chance at having a respectable 30 million-ish userbase, which is at least decent.
Iwata always has said they waited too long to drop the GameCube to $99.99.
I don't think they should abandon the tablet pad though ... go ahead and make a Nintendo Land 2 and bundle it together with the pad. Just sell it seperately.
You have to get the console in people's homes first though, that's more important than trying to sell a controller.