Wii U wouldn't be a success, just because the Wii concept itself is outdated and unnecessary today -- in 2006 how many games were made expressly for casuals? Maybe like five? Today there are thousands, thanks to iOS/Android, and the problem of traditional controls has been solved by easy touchscreen controls.
So there is no need for the "Wii" ... today it's just an overly expensive concept with $50-$60 games that no one wants. The novelty of looking silly waving your arms around in front of the TV fizzled out a few years ago too. It's not a "wow, I need to have that in my life" thing anymore in gaming, people got their fill of Wii Sports, Kinect Sports, and bazillion other cheap mini-game knock offs the last few years that they're not interested in doing that again, just like guitar/music games got tired after a few years and having tons of plastic instrument junk laying around the living room.
If you want to make games for the casuals you have to play by the new rules that Apple has set for that part of the market -- games must be dirt cheap or better yet free and stripped down of play mechanics to be very simple, and the hardware has to be a cool fashion statement ... things that Nintendo isn't able to deliver on.
iPhone is simply just a more appealling casual platform than the Wii ever was.
If Nintendo had made a reasonably high powered console (something legitimately 3-4x more powerful than a 360 with about 4GB of RAM) and planned their software releases better, ditched the Wii brand, I think they'd be headed to a comfortable 2nd place finish this generation with a fairly profitable console that would sell about 40-60 million units.
MS made so many mistakes this gen with a 1 year head start, Nintendo could've capitalized.
