Arrogance is the wrong word here. More like a blind person lead down the wrong path.
They did listen to ONE 3rd party dev, that was EA with their unprecedented support. Remember E3 when EA was like Wii U is a powerful exciting machine etc..I think Nintendo hopped that if they won EA over that others would follow. Instead EA trolled Nintendo.
Could Nintendo hardware been ore powerful? SURE, however realistically who would pay a higher price for a Nintendo product? Nintendo have conditioned their consumers as being a lower price product. If they jumped to $400USD-$500USD no one would have bought it even with added value. They would have to sell it at a significant loss to sell hardware. Nintendo cannot do that as their business is purely gaming. Sony and Microsoft are diversified so they can take bigger losses at launch and still be operational. Granted Sony has been in a bit of a down with other divisions not performing well either. However if Microsoft really wanted they could sell the XBOX one for $100 and no feel a pinch (except a few pissed off investors who have no idea of long term building and want short returns)
Finally the whole whole 3DS removing 3D and people still knowing its a next gen model cause it has a "wide screen" is absurd. To this day people still think its a new DS model and even some game sale websites group the two under DS lol. It really needed a new name or better marketing.
The other major mistake Nintendo made was thinking word of mouth would sell the Wii U like it did the Wii. Problem is Wii U has an identity crisis much like the 3DS but far worst. People think its just the gamepad as a Wii addon. Nintendo is also somewhat out of touch with the West. It worked great in the N64 era when Nintendo US and EU could go out and close development deals. So many good game come out in that period as NIntendo published (even though the hardware sold bad compared to PS1). Now that Japan controls everything it isn't working.
