It is kind of odd that Nintendo has pretty much disengaged from the West, whereas in the 90s they were much more of an East + West company. Why the change and is it warranted? Especially when the West now is basically the entire console market? It seems to basically all trace back to Iwata and even Miyamoto moving up the ranks on Nintendo's Board of Directors. A few points I'd raise:

- Iwata after being groomed since about 1999/2000 takes over as Nintendo president officially in May 2002. His first major move as president? Selling Rare to Microsoft in September 2002. Despite spin at the time that Nintendo would use the money from the sale to invest in a similar Western studio (Zoonami was thrown around a lot), this never materializes. 

- In basically two years, Iwata dismantles pretty much all of Nintendo's Western relationships. Silicon Knights is out. Factor 5 is out. NST is downsized to a Mario Vs. DK studio. Left Field is out. The deal for Star Wars exclusive games is not renewed. Nintendo Sports is shuttered.

- Now you may say 'b ... bu ... but Retro!", but Retro opened in 1999 was supposed to supply Nintendo with *multiple* games in genres like action/sports/shooters at once. That was Howard Lincoln's brainchild. Under Iwata, Retro is stripped down to one team and kept under an extremely tight leash where they only work on Nintendo IP. The same is basically true of Next Level Games (one game at a time, on a Japanese Nintendo IP only). Nintendo does work with a very small handful of Western companies, but basically only lets them work on Japanese IP that they're too busy to do themselves. No chance of an original IP like GoldenEye, Eternal Darkness, Killer Instinct, or NBA Courtside being greenlit here. 

- Under Iwata, Nintendo finances many different 2nd party Japanese titles ... The Last Story, Bayonetta 2, Zengeki No Rengleiv, Endless Ocean 1/2, Pandora's Tower, Fatal Frame IV/V, Devil's Third, The Wonderful 101, etc. etc. etc. Yet they never do this with any Western developer, even though Western devs like the Darksiders guy did make advances towards Nintendo. Nope, Nintendo only bails out a project, like Devil's Third or Bayo 2 if it's a Japanese developer. Tough luck if you're American/European. 

- Monster Hunter was a huge hit ... in Japan. Notice how Nintendo moved quickly to secure that as exclusive? But what about Western trends? They apparently won't even talk to the Minecraft people ... how much do you want to bet if Minecraft was a Japanese IP that there would be considerably more outreach from Iwata's Nintendo on it? You'd probably be able to play it on your Wii U/3DS right now if that was the case. 

- Another example of Nintendo's complete disengagement from the West ... Activision actually apparently offered Nintendo exclusivity on the Skylanders franchise while it was in the conceptual phase, Nintendo basically told them "thanks, but no thanks". 

- All their crossover games too are basically Japanese collaborations only. Hyrule Warriors, SMT x Fire Emblem, Metroid: Other M, Pokemon Conquest, Mario & Sonic are fair game ... but doing that with a Western IP ... nope. 

- NOA is basically stripped of any real power they had. Reggie mentioned they liked Media Molecule (LittleBigPlanet) too and had them on their radar but Sony beat them to the punch. I really have to wonder if a lot of that has to do with NOA having no real power to make deals anymore. Iwata basically granting himself presidency over NOA when he himself admits he doesn't understand the Western market as well as Japan is just incredibly non-sensical. 

I'm not saying supporting Japanese development is bad, but really the above points to a bit of a disturbing trend of bias. I understand Iwata comes from the Japanese game developer community and maybe views it like a fraternity where deals are inked over glass of sake, but really there should be no excuse for Nintendo to be a more closed off Japanese company in 2014 than they were in say 1997. 

The region locking is pretty stupid, but DLC bandwagon? Not really, no.

Unless we consider bonus expansions to content that are tertiary to the main game as "DLC trash" akin to what Ubisoft/EA/etc like to pull. Its not like all DLC is bad, there's nothing wrong with DLC that functions exactly as how an expansion functioned in the past. Its the Day-1 DLC/on disk DLC of content or games deliberately made to end without DLC that are bad.

If the Stamper Brothers weren't cashing out and retiring then Nintendo might have considered buying Rare.  But as it was, they were getting out of the videogame business.  Nintendo also didn't want to get into a bidding war with the other possible suitors that were willing to buy the Stampers shares for an inflated price.  Plus they probably considered that Rare's highest selling non-Donkey Kong game, which was Goldeneye, was an IP that didn't belong to them and was developed by a team that already left Rare (Free Radical Design).

But this is on some of their games.

Just read most of the replies in this thread and it seems the only thing Nintendo really lost under Iwata was Media Molecule and Skylanders exclusivity deal. Big franchises, but definitely not signs of Nintendo being Japanese bias considering the points the OP suggested.

Meanwhile Nintendo's happy to fund things like Wonderful 101, which apparently had a large budget at that, and proceeded to flop in Japan and then everywhere else worldwide. Would they allow a Western studio to do that? No way. 

Wonderful 101 was greenlight because Hideki Kamiya has proven himself as a skillful developer with good work ethic and has built his relationship with Nintendo with games like Viewtiful Joe on the Gamecube.  

Talent is hard to find and relationships take time to build, even Rare took time.  Though Nintendo should be actively looking for possible talented and driven partners in the West.

Nintendo could also strike deals to make another Epic Mickey, Goldeneye Reloaded or Rogue Squadron but it requires the right talent pool and the opportunity for a license must exist first.