Having to buy an add on vs downloading straight to your Wii U. Big difference right there sir, and the Virtual Console is already a success

Virtual Console vs Add on accessory, big difference sir (One is successful, one isn't)

No, they're about even in sales at their points in lifetime

So basically a Wii U DS? Just like Super GameBoy etc.

I think you've stumbled onto something there. In fact I do believe that just might work.

@OP

I dunno man. It would be much more a pain to look between the tv and the Gamepad screen for some DS games.

I dont think it would "save" Wii U but it would be a nice feature

The Wii U has plenty of video games coming out between now and the end of the year. It's gotten through the worst, and things will likely begin to pick up from here. Any attempts to "save it" at this point are unnecessary and likely wouldn't contribute much, due to the games coming out soon likely grabbing attention already (Pikmin 3, WF101, WW HD, Super Luigi U, Game and Wario, etc.).

My point here isn't to say that this automatically means the Wii U is fine, but if the upcoming lineup of games doesn't help it dig out of the hole it's in, DS compatability sure as hell won't.

From a design point of view, just because you're using two screens playing WiiU, it doesn't mean all 3DS' games will play just fine.

You have to upscale resolution and it would still look bad.

People thought the 3DS was nothing but a new version of the old DS. People still think WiiU is a Wii accessory. Adding a functionality to a product consumers don't even know exactly what it is might be even more confusing.

Nintendo would canibalize its own portable market.

Nintendo would be admiting WiiU is nothing but a glorified 3DS, like some say.

Explain how? Keep in mind that to Nintendo, the larger profit margin is in SOFTWARE, not hardware...how is having an extra base for the 3DS classed as cannibalising the market? 

Also, was Super Gameboy an admission that the SNES was a glorified Gameboy? No, just market it as Virtual console, like the rest of the pre-gen software on the system.

Wasn't Nintendo already entertaining this idea (which you didn't think of first) themselves? I seem to remember a WiiU accessoiry being rumoured. It's not farfetched to think they would do this, they made the Super GameBoy and the GameBoy Player as well.