"I think it sold lower than our expectations but on the other hand it was a really unique game." - Shigeru Miyamoto
They never said it was an outright failure, but this is a case where a big casual title fails to meet Nintendo's expectations with the company admitting as such.
Besides, as a publicly traded entity, Nintendo is obligated to be honest about the commercial performance and sales expectations of big releases. They have to make it clear to investors what they expect from a title, and how well its met those expectations.
There are plenty of flops that get glossed over and Iwata was specfically asked if Wii Music was a sucess or not. I wouldn't characterize answering an interview question as coming out and saying it. Especially when none of the other mistakes are outright mentioned (nor should they be). They focus on those parts of their business and they should.
Furukawa knows what's up. Pages 9-17 in the following link outline Nintendo's direction going forward. Nothing new, really, but it's a good summary for those who've never paid attention before.
I was pretty surprised to see investors so upset with it. Switch is doing super well, and Nintendo doesn't feel the need to invest in mobile any more.