I don't see how. Its not like a PC. When a game is being created on a console it has a certain amount of memory to use. The dev then uses it as needed without worrying that some other background item will steal it. A PC game has separate memory and lot more due to the many constant functions its always doing along with generating high end visuals.

What's funny is that was from one of the original Wii U rumors.

Not because of it being used up; because of the increased latency and reduced bandwidth to system RAM compared to GDDRx RAM with a fast bus. I don't know how these consoles are layed out inside but I doubt the GPU's path to shared memory will be as fast as the same chip in a desktop GPU's with dedicated memory.

In consoles shared Ram of course is GDDRx are something comparable (e.g. see XBox360).

yeah idk. I'm labelling it as shared for now until I see a rumor showing otherwise. 1.5gb has been a long runnign rumor and it was labelled as GDDR5 at one point. So this may really be only discussing the video RAM and who knows about the other RAM yet.

I can't wait for a real tear down personally.

1.5G sounds odd, though. PowerPC CPUs have 256bit buses, AMD 4xxx GPUs either 128bit or 256bit.
Probably 2G 256bit wide memory with 512M reserved for the OS.

I was thinking that originally, however as I read more about the 512MB rumor it appears to be more of a flash memory for OS storage than it does RAM to be used by the OS and other systems.

Either way it still only leaves 1.5GB for the rest of the machine in a shared setup.

1.5GB RAM seems extremely low... Their GPU also seems very underpowered. What doesn't click right in my head is why these two numbers seem so low yet the CPU seems to be fairly decent. If anything, the PS4 CPU looks very low.

Am I reading all of this wrong?

And from what we know now, where exactly does this place the Wii U in terms of overall power? I was really disappointed when the Ubisoft reps insisted on telling me that the Wii U was just perfectly on par with the 360 and PS3.

4 core Intel? The 8 core Bulldozer chips can barely compete with a dual core i3 with hyperthreading. Their single threaded performance is truly appalling.

Having said that, they have decent multi-threaded performance, so if games are designed to use multiple threads they may just get away with it.  At present, it's rare for a game to use more than 4 threads though. Plus, if the OS is designed with the Bulldozer architecture in mind, they may get some added benefit.

According to this post, WiiU is rumoured to have 32mb of EDRAM:

http://gamrconnect.vgchartz.com/post.php?id=4612535