The reason PS2 has lasted so long, and the DS has continued to get consumer support is because their respective successors failed to spark with the consumer. So my question is why would Nintendo want Wii to coexist with Wii U? So I worry a bit for Wii U when Reggie talks this way. It's almost like he's expecting to do a PS3 or another 3DS with Wii U.

The DS has gone from shipping 17.5M last FY, to an expected 6 mill this FY? that's an 11.5M decline YoY. Wii has been seeing Yearly drops of about 5 million per FY, but should only drop 3m this year if they hit their target, given how hopeless they are at forecasting however it's likely 11m. Those drops were occuring whilst the Wii was still relevent bare in mind ..

The PS2 comparisons make no sense. It sells in developing countries (practically dead in the countries that made it so huge) Wii won't get this. GC and Xbox were dead, and 360 and PS3 were expensive, it even took Wii a little while before it really took off.

Wii will still have the Xbox 360 and PS3 (which will outlast Wii) to contend with, along with the WiiU, which will likely take time to build up momentum (like most debutes).

With little to no SW support, rapidly cutting the price (thus cutting its legs firmly short, I expect they'll chop another $50 off next xmas) the Wii won't last long along side the WiiU. It'll do well next xmas as most retailers will have it at $99, but the PS3 should be $199 then, and 360 and Kinect will be cheaper. Along with 3DS, WiiU and Vita, the Wii really is the odd one out here ... it's going to sell incredibly poorly in the year (Feb - Oct) I wonder if Xmas will justify keeping it alive for Nintendo.

Maybe only in development countries where the Wii U will be too expensive while the Wii will be cheap and easy to mod.

No... in fact, Nintendo is going to be in a similar situation with the Wii / Wii U as Sony was early on with the PS2/PS3 in that Nintendo will be relying on sales of the Wii to keep them afloat financially while they'll most likely end up taking a loss on the Wii U hardware initially.

This is a double-edged sword for them though, as this will also lead to the Wii U starting off slow: the casual audience will continue to go for the cheapest and most popular consoles out there like the Wii and the 360, while the core audience that Ninty is trying to recapture will be hesitant to drop $300 or more on yet another console that basically plays the same games that their 360/PS3 already does.

My prediction is that after the initial holiday 2012 launch (which will be successful no doubt), the Wii U will slow down considerably in sales and Nintendo will be faced with the same predicament that they had with the 3DS which was a shortage of compelling software and slow sales, so they'll be forced to cut price to stave off the incoming Xbox 720 in 2013 (and possibly the PS4 as well), and within the next year or two they'll discontinue the Wii altogether to force the casuals that want those types of games into buying a Wii U.

The bolded was also my gut reaction, but then I realized I was possibly wrong. Yes there is no more core games support for the Wii from 3rd parties, but it is still getting Lego games, Disney games, dance games and such, and they are doing quite well. So actually, given its 90 million or so user base, we may see 3rd parties continue to support at least such games (as long as they continue selling). And since all these games will be playable on a Wii U as well, there will actually be some extra incentive to continue developing for the Wii.

This is all in theory of course, only time will tell. The biggest obstacle I see will actually be the lack of new Nintendo games fo the Wii.

Another point I'd like to make in addition to my previous post is that the Wii's days are definitely numbered... it will not enjoy the long walk into the sunset like the PS2 did in its twilight years. This is backed up by almost every console and handheld Nintendo ever put out, with the exception of the original NES and the SNES, which each lasted for nearly 10 years before they pulled the plug on it.

As soon as the N64 and GC were replaced, Nintendo pulled the plug on each, for obvious reasons. Even in the handheld market where Nintendo enjoyed tremendous success with each version of the GB and later DS, they indirectly killed their older systems off by syphoning off software support for them in favor of newer ones, so with no compelling new games they all ended up dying quick deaths despite not actually being discontinued for some time. For example, once the GBA hit, Nintendo killed off software support GBC almost immediately. Then they did the same to the GBA once the DS hit, despite the GBA's tremendous success and the fact that Nintendo touted the DS as not a direct successor to the GBA but a "third pillar" that would co-exist with the other systems (yeah right!).

Now the same thing is happening with the DS and 3DS... despite the DS's huge success and install base, there's really no major games on the horizon for it by Nintendo themselves as they shift their software focus completely to the 3DS. With no new major games out for it since Pokemon B&W, the DS is slowly dying off despite it's affordable price and huge library of great games. Mark my words... Nintendo will pull the plug on the Wii before the end of 2013... they've already done so in the software department, so making the hardware announcement will just be a formality.

No.
Wii is struggling to keep itself alive now, why would it survive the WiiU?

I think they could but it would impact Wii U sales. I know alot of people who call 3DS the 3D model of DS and not a next gen system. Even some shops have 3DS games mixed with DS games as they have no clue,

They need to drop the price now, crack the 100million mark, kill the console and give Wii U a great launch before Microsoft launches next gen.

I would like to see wii until Xmas 2013 and in for 125 mil.

It will coexist so as long as its making them money to make up for the losses they sustain when the Wii U launches. Once consumers have lost almost all interest in the Wii, then they will cease production. But that probably wont happen for a couple more years; despite stoping support from themsleves.