As I see it, they should have done 1 of 2 things:
Launch a “Wii 2” in 2011 that was essentially the Wii U without a game pad for $300. Keep the Wii-mote, include a classic controller pack-in, keep GameCube b/c. Release Skyward Sword as a cross-gen game on both Wii and Wii U.
This would have given them a couple years of being the most powerful platform and direct competition with Sony and Microsoft, and a few more years where they could have continued to get most of the big third-party games thanks to widespread cross-gen development. Follow that up with the Switch in holiday 2016.
Alternatively, they could have released a truly next-gen console in 2012 that would have been underpowered but still capable compared to PS4 and Xbox One, continue to lean on the Wii for casual fans, and use the Switch hardware to power a Switch successor. This seems pretty un-Nintendo though.
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