The Wii was a very different experience than Smartphones and tablets. The appeal was also different.
Well there wasn't any competetion for the casual dollar/time then either.
It's like saying the NES dominated, so Nintendo should just do what they did with the NES again ... well ... yeah ok, but there's a lot more competetion today for a conventional console so Nintendo can't do what they did back with the NES.
What some Nintendo die-hards don't want to admit is the same thing happened for the casual audience. Other options moved in, since the rist of the app ecosystem around late 2009 where Angry Birds released in December 2009 and became the first (of many) smartphone casual phenomenon blockbusters, the appeal of things like Kinect and Wiimote have decreased significantly IMO.
Wii motion gaming is old hat now, no casual player would brag to his friends that he was "playing some Wii Sports yesterday" ... that's old and outdated today.
Casual market is a different market too, very trend/fad based, more like the mainstream music industry where something is hot (RED hot) for a period of 2-4 years, then it becomes taboo to like that anymore because it just shows that you're not "hip" to the newer trends.
Nintendo fans I think have a difficult time accepting this too (then again, they love 30 year old franchises, so its a very alien concept to them). 2006 was a long, long time ago now.
The other death knell for casual gaming was people getting used to getting games for $1 or even free. Now trying to convince them to pay full price for a game has become difficult if not down right impossible. It's like asking people to pay $15 for a music CD these days ... good luck. Some people will do it, but too many people have gotten used to getting music for cheaper (or free).