Considering Iwata's path to the presidency, I have considered for some time the possibility that he views Masahiro Sakurai as a potential successor.

Sakurai has health problems that probably invalidate that.

Anyways, i dont get the hate for Iwata. Nintendo's biggest problem in my opinion is that its still very much a Japanese company based on japanese culture. People familiar with this know that its always a problem to negotiate with Japanese companies because in theory they value the spoken word more than the written contract.
Obviously i dont know what happens behind the scenes, but the main probablem with 3rd parties outside Japan seems to be how they communicate with them. Add to that some very specific attacks and low blows from EA and Epic not having engine prepared for western developers to work on the Wii U pretty much blocked Nintendo of any western support, and they probably resent that, making the issue a difficult one to resolve.

If you ask me, they should buy Epic and should have them adapt their engines to their systems. This way they would also profit when other companies made games for the other consoles. This would probably easy relationships with the 3rd parties due to common interest. That would be a more visible improvement than demoting Iwata.

Sakurai can't be president because he has hand cramps that would go away if he stopped playing video games for a couple of months?

I'm pretty sure that Nintendo buying Epic wouldn't increase Nintendo's value, but destroy Epic's value. Seems like a bad investment.

You care to elaborate? It would give common ground for 3rd parties to negotiate with Nintendo, it would allow easy acess for engine architectures popular in the west to be compatible with Nintendo platforms and it would tap into all the licenses sold for development on other platforms. They could actually lower the price on the engine licence when its used on Nintendo platforms.It seems very beneficial from Nintendo's point of view. From Epic's point of view would be beeing part a a grander group with better work stability. Epic's business by itself would not require any changes. It would just be addition to Nintendo's viability as a platform and hold some pressure over 3rd party publishers and its competitiors.

I actually like this idea in theory - POST THIS TO MIIVERSE AND NOJ WILL HEAR YOU

Well it's a bit of a conflict of interests. Epic's main source of income is licensing their engines for use on mostly non-Nintendo platforms. So Nintendo would have to choose between providing software support to companies developing for competing platforms and severly crippling Epic's value by restricting Unreal Engine to Nintendo hardware.

Naturally, Unreal Engine would start to look less appealing if its license carried a stipulation that every game developed for it HAD to have a Wii U version. Nintendo could do it, but I don't see why they would.

José Mourinho!

Iwata was an odd choice? Man, he brought Nintendo from 21 million Gamecube sales to 97 million Wii and 154 million DS sales. And now they already sold 31 million units of the 3ds. He made them a shit ton of money.
Still doesn't change the fact that Wii U is still tanking. BTW, i seriously can see Tezuka as a CEO.

Someone young, who live and breath the new generation or something.

Iwata is only in his 50's. You're not going to get somebody much younger whose qualified.