Personally I think going back the hardware philosophy of the N64/GCN/SNES of having better hardware may not be a bad idea given the modern market, where free games and $100 tablets (soon they'll be $60) have really hurt Nintendo badly in the low-end/kids market.
To differentiate they need to move more upmarket because you need to increase the difference between low-end cheap gaming (tablet/phone games) and what you're offering if you want to sell $30-$60 games in this day and age.
Even if the NX console "only" sells N64 numbers (33-35 million lets say) ... that's a huge improvement from the Wii U and imagine how much more games like Mario Kart 8 and Splatoon could've sold with 3x the userbase.
A powerful console + a cutting edge portable that can share games, even of PS4 quality on the portable (scaled down a bit and cheating down in resolution of course) wouldn't be the worst combination in the world, they would score a lot of developer support.
Powerful doesn't necessarily mean expensive either, not if you are smart in the components you choose and stay away from expensive hardware gimmicks or get tied down in weird proprietary designs.
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