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Yup this is exactly what I think -- the next Nintendo handheld (tablet form factor) will be able to run Wii U engines "reasonably" well. Much closer than the Vita can with PS3 engines. Say 540p resolution at maybe a slightly lower frame rate or something.

This will let them port/or "retool" games like DKC: TF, Mario Kart 8, Smash U, Zelda U, etc. which probably isn't going to make as much profit as they want on Wii U to their new portable platform which will be able to play Nintendo games all the way up from the NES to Zelda U.

There will be a "home dock" that lets you play on your TV if you have the handheld model, and could bump the resolution to 720/1080p too I think.