The problem isn't going to be the hardware, it's the games. The difference between Nintendo console games and Nintendo handheld games doesn't exist just because of hardware limitations, it exists because people usually want and expect different things in a handheld versus console games. The fact that Nintendo gets this is the reason they are still dominant in the traditional handheld game market.
Having said that there are certain genres and types of games that can work equally well on handhelds and consoles and i think this is where Nintendo might be thinking to bring parts of their business closer together. I wonder about the possibility of them working towards producing game engines that easily scale between their home and handheld hardware, something that will be facilitated by the rapid improvements in mobile processing. That way they can release digital titles that can be played on either system. You can opt to play the technically better version of the game on your home console or play the handheld version on the go, with the option of streaming to your TV from your handheld when you are at home.
Ultimately they could do this with most/all their titles, provided the user input is similar enough, and let the consumer decide which games are 'handheld/mobile' and which are better played on the big screen with better hardware.
While i think the days of dedicated consoles are numbered and even though the Wii U isn't doing great, Nintendo will still make money from it and I think voluntarily retiring any profit-making venture and placing all your eggs in one basket is never a wise decision. I think they will try to make money from consoles as long as they can.







