Even if there are different form factors, the "console" will flop.
The Wii U can barely sell 1/5th of the 3DS (same goes for GameCube to GBA) even with a host of better exclusives and way better graphics.
Now you're going to remove whatever exclusives it had left (bye bye Splatoon, Mario Maker was already gone, bye bye Breath of the Wild, Bayonetta, etc.) and pump up the graphics of the portable so that's close to the console (has to be, can't have a unified library without this).
Remove the exclusives and close the graphics gap from like 20:1 down to like maybe 3:1 at best ... and the console is just a glorified accessorie, like what VitaTV is to the PSVita.
Why force people to pay an additional $200+ just to play games on their TV. Most people are going to say "fuck that". Only Nintendo fans who just MUST have a Nintendo box under their TV are going to be interested and this is already a small audience as is.
If unified library is what Nintendo wants, they might as well just do the hybrid thing (which is what multiple sources are reporting) and then maybe have the option for a supplemental home dock (maybe). No one but a tiny group of Nintendo loyalists is going to spend $400+ to buy both devices that play the same games, and very few people are choosing the console over the portable when there is no difference in library and only a variable difference in graphics.
