Well, I think they had two different paths they could have taken.
First option: Use the money spent on the Gamepad to put more power onto the Hardware. That way they could have released a console with almost the same power as the X1 and for a price of $350.
Second option: Have the Gamepad as an optional accesory from the beginning. That way they would have been able to launch the console at a price of $ 250.
Now let's talk about the launch lineup: Man, kids and teenagers nowadays are crazy for FPS online shooters and open world games. You will not convince the kids of today with a 2D platform game. Especially not when you're promoting what is supposed to be a new generation of consoles. So I think instead of launching with Nintendoland and NSMB, they should have launched with a Metroid game able to compete in graphics (and online features) with the FPSs of today. And the Zelda U should have been released at least within the first year of the console.
Now, I don't think any of this would have been enough to replicate the Wii's success. But at least they would have been fighting for the second place now.
