What didn't go wrong would be the better question, it's probably the single most horribly conceived, designed, and marketed console from any major manufacturer ever and the fact it sold 13 million at all is a testament to the power of Nintendo's IPs to sell even a completely undesirable product to an extent.
As to the hardware power debate, power is just one of many things consumers consider when judging whether a product is good value. It's a factor, but it's not the not the be-all end-all. If it was, systems like the PS2, DS, and Wii wouldn't have comfortably outsold their rivals.
The Wii for example was weak, but it was still a great value proposition because it offered a fun, novel and accessible controller interface and hugely desirable software. The value of the gameplay experience it offered outweighed its lackluster processing muscle.
SWOT the Wii U.
I describe myself as a little dose of toxic masculinity.