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Can Nintendo even realistically support a PS4 level hardware ... while still making seperate Vita+ level handheld games and smartphone games?

IMO the answer is a resounding NO to begin with.

They can't even deliver an HD Zelda in under 4 years of development.

How the fuck is the next super-duper Zelda PS4-level gonna work under this Nintendo fan fantasy? 7-8 year dev cycle?

People are not happy with the Wii U/3DS release schedules as is. 

Like I said unless Nintendo wants to hire 2000 new people (which they will never do) Fusion may be less a choice and more of the only viable way Nintendo can have multiple hardware models going forward, unless you want zero improvement in visual/design fidelity.