I'm not sure I follow your logic here... since according to you Nintendo failed at every corner of gaming in the last 2 gens, why vote for the guy who was in charge for most of that period?

nintys 2 lesser evils. pick the top dog in disgrace. its a paradox. 

Yamauchi

Yamauchi, because Nintendo has made some questionable decisions under Iwata.

Yamauchi

But Yamauchi learned that lesson after failing with the Nintendo 64. Something that still causes them troubles, specially regarding 3rd party support.

Iwata, under him Nintendo gave us the DS.

But then I think WiiU's direction is not a mistake like you. Yamauchi/Iwata were samrt and saw that after the GameCube Nintendo couldn't compete head to head against Sony and Microsoft so they chose the other route.

And that worked very well until now, when in house developed games are no longer enough to attract new users.

And at the same time we have reached a point where development costs are so high that no one really wants a generational jump as big as the last one. Most of the developers complain about the lack of memory and disk space, not about power. Nintendo has seen this and (if they are right) the WiiU will be perfect. It will be a noticeable jump compared to current gen consoles without being very expensive to develop for. And then they have added the new controller.

That is the job of a good CEO, to see where the market is going and the troubles ahead. And while he has failed with the 3DS, the rumors about WiiU seems to suggest that he will be right this time.

But sooner or later you have to release a new console (either because you feel constrained or because the others have done it and you don't want to risk your market position), and you have to relocate your studios to start developing games for that new console. And here is were 3rd parties enter as they can fill that void. Add the fact that Nintendo also launched the 3DS and you find yourself without enough teams to develop for all your consoles, having lenght periods of time with litle to no launches for your console.

That's why Rhythm Heaven moved so much hardware, it came in one of those droughts. And that's also the reason why Iwata wants 3rd party support for WiiU.

What if we make that question the other way: who would buy the other consoles if they could find all Ninty games + all multiplat games on the same console? I like games, and while Nintendo gives me very good games, there are also good games on the other platforms that I can't play on my Wii. So the only way to play them is having another console. With WiiU, the goal is to have all the Ninty and multiplat games (and I'm thinking in multiplat with PS4/nextbox), that's why I think Iwata is right this time.

But Nintendo (or anyone else, for that matter) doesn't have enough teams to support all their consoles at the same time. Yes, they can launch 4 or maybe 5 games a year/console but with 12 months to fill with releases you have to either create more teams (something expensive and that doesn't always work), force your actual teams to produce more games (something that will hurt the quality of the games) or have the launches of 3rd parties to help, which not only is not bad but it is actually good as you earn money from royalties.