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midrange said:

The thing is, the controller design, the graphics limitations, the console design, and the online capabilities are all hardware decisions not software decisions.

Online "capabilities" may be a hardware decision, but I doubt what you think you are referring to are actually the technical capabilities of Nintendo's consoles. Nintendo's online offerings are quite capable this generation. Common complaints are usually about digital purchases being tied to consoles rather than accounts, lack of achievement equivalents, things of that nature, which are absolutely software decisions, not hardware.

There's some great insight at the beginning (starting around 6:30) of this podcast about Nintendo Wifi Connection (Wii & DS online service). Long story short, friend codes obviously had nothing to do with hardware limitations.