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Aside from Xenoblade X, I am not sure that Nintendo's focus has really been on pushing hardware the way that western developers do. What's the point when the XOne and PS4 will always be miles ahead in the graphics department?

Irrespective of graphics, I think the more important observation is that Nintendo has been getting progressively better at developing games at the HD standard over the past 3 years. Back in 2013, even a game like Pikmin 3 (which basically was re-using Wii assets) was stumping Nintendo. Now, all of Nintendo's 1st and 2nd party developers are cranking out 720p games and while there are still delays they do seem to be hitting their stride. This is actually really good news for Nintendo heading into the NX, especially if the NX will be producing PS4 level graphics. I think that the Wii U was a necessary step for Nintendo to get back on even footing with Sony and Microsoft... They needed this intermediary, less successful console for Nintendo to make some of the necessary advances that the Wii neglected. Now Nintendo is in a better position to go guns-a-blazing with the NX if they choose to take Sony and MS on directly.