Actually that's pretty true for everyone, everyone wants games they can play easily and will engross them for a period of time, its not just a "casual" demand
Sometimes they do, but most will still go out and seek the $60 meal if its so delicious that its worth $60, the key is giving the value. (People eat the cheap meal because it gives a value for its low price, if they can get value that compares to the price for the higher priced meal they will eat it, maybe not as often, maybe once or twice a month as compared to once or twice a week for the cheap meal, but they will still seek it out)
Bad Mario games are not enough you are correct, thing is its been a long while since Nintendo released a quality Mario game (back in the SNES era)
Nope, the Wii delivered value, the games Wii Sports & Wii Fit were somethings that engaged people, thing is, no system has found the next Wii Sports or Wii Fit.
As I said, if you don't satisfy the value demands of the expanded audience, they won't buy.
Expanded Audience gamers are not stupid, they won't buy crap, they demand value. In many ways they are more discerning than core gamers, who will buy anything that gets good reviews, expanded audience gamers care little about media reviews.
Its not price that is the barrier, its the failure to deliver quality, even Miyamoto admitted he hasn't been delivering the quality that the expanded audience wants when he said that:
"Their attitude is, 'okay, I am the customer. You are supposed to entertain me.' It's kind of a passive attitude they're taking, and to me it's kind of a pathetic thing."
He wants to make games that appeals to him, not games that give value to the expanded audience, this is why they have failed to retain the expanded audience, not because of the rise of tablet and mobile games.
Except expanded audience gamers bought plenty of crap for years (Carnival Games, mini-game collections galore).
They don't care about "quality" in the way you think.
Nintendo Land is a pretty damn high quality game, so is Wii Fit U (better than Wii Fit or Wii Fit Plus), so is Wii Party U (far better than Wii Party) relative to the genres they are in. Even Kinect Sports on XBox One is quite high quality.
This audience just doesn't care anymore, they continue to buy crap, they just do so today on the iOS/Android marketplace where junk like Kim Kardashian's game can become a big hit.
If Nintendo wants to make games for casuals, they certainly can. It just means selling superficial software and chasing trends and then selling it for $1 a pop.
They're not willing to do that, as such they are irrelevant today to the casual gamer.
This is an audience base that thinks Flappy Bird is "awesome!". If anything Nintendo tried waaaaay too hard with Nintendo Land, they missed the point, that audience doesn't want anything even that complicated or deep, Nintendo Land needed to be dumbed down far more than what it was actually to appeal to this audience. Casual gamers are the reality TV fans of the game business or the pop music fans of the music industry.