Boils down to overall revenue and profit per unit.
The Wii U has underperformed expectation and Nintendo prioritized profit margins over revenue with the understanding that slashing margins by dumping product near cost would not reverse sales trends.
The Wii U should see good sales over the holidays; Nintendo products in general trend more like toys in terms of where sales are loaded. This year appears to be no different as the Wii U was reported as being a hot item at Target.