I don't get it. Are you actually treating a home console and a handheld as if they were the same?
Even if they have stunning visuals it is still an uncomfortable controller and has a tiny screen. Are you telling me consumers don't care about those features?

I think your argument for a handheld console like system will be more convincing if you tell us more details about it. Pretend you are future Nintendo President releasing this system. Tell us this system's specs, price, controllers for home console experience, and other interesting functionality the system will have and your plans of marketing this system.

Take a Vita level chip. Add 25-50% more raw horsepower. 2GB of RAM. 

5-7 inch screen (depending on the form factor Nintendo wants). Single screen, buh-bye DS setup. 

$199.99 launch day price. That's cheaper than a 3DS day one. Maybe a home companion chip that lets you run games on your TV wirelessly (the reverse of the Wii U). 

Compatible with exteral controllers (like a Wiimote). Many people have kind of mentioned this already, so it's not all that inconcievable. 

I'm just looking at the repurcussions of what such a powerful Nintendo handheld would have. For the first time I think you'd have a Nintendo handheld that can run most Nintendo franchises with a fairly high level of visual fidelity and not have to compromise on a lot of things. 

I think once you get to 3rd gen 3D you start to reach a point, especially with the types of games that Nintendo makes (as they don't aim for hyper-realism) where the graphical fidelity is such that, sure you can go better, but what you have still looks nice. 

I understand, that'[s why they would also offer 3ds like games as well, just in different financial tiers. So you would have your Main experiences, handheld experiences and eshop all on one tablet which can interact with your tv as well as a console. So those who like pokemon etc would still have the play on the bus game.

I'm sure they could create a dual screen in the way that you can by splitting a tv screen for the handheld part of it (when playing 3ds like games) then it could have the functionality to revert to fullscreen for offscreen play/ tv.

You make some very valid points for why it would not work but I think there is also some good points to intergrating the systems, especially if the console sector does not eventually pick up.

The $199 price sounds good. But I don't know how I would feel about a next gen Zelda game on a console with a Vita chip that has 50% more power. I'm sure graphics can be displayed in more ways than photo realistic art style and the next Xbox or PS will really outperform this hybrid system's graphic potential. Will the 50% more powerful Vita chip even be in the same level as Xbox One in graphics and power, let alone more powerful? 

And if you have time, can you give us an idea on how you can market a handheld game and its home console version on this hybrid system? Will the box say "Made for on the Go?" Or will it have something like streetpass function to encourage gamers to travel with the portable game?

This idea is interesting but too radical. It may seem logical to have a hybrid when home console nintendo systems sale poorly now and handhelds are doing okay but that doesn't mean to combine the two. Rol said it best, that combining the two not only combines possible strength but also weaknesses. I think the market's expectation for a handheld and home console is one of those weaknesses this hybrid will inherit.  

It's already an issue for me personally. The main reason I don't want a WiiU right this instant is because Smash is going to be on both. You can get that, 3D Land, ALBW, and Pokemon X/Y on a portable device that costs up to $200 less if you get a 2DS. Meanwhile, the stuff I'd want a WiiU for, like Bayonetta and X, have been pretty much radio silent since E3.

Nintendo isn't doing a good job of convincing me why I shouldn't just get a 3DS for Nintendo stuff while waiting to see how the WiiU situation pans out from here. A more advanced handheld in a few years from now will only make the issue worse.

That will not happen at all. Handheld games run at a far lesser resolution than their console counter parts. Even if Nintendos next gen console is slightly more powerful than the PS4/Xbox One it will outdo anything a hand held could easily. Even in the near futrue.

Thats kinda true. I expect Nintendo next handheld to support dx11 level graphics, and those may become so good in a small screen that you can't see much difference when comparing it to the next gen home console which should have around 2.5~Tflops of performance (10x Wii U?)

And I want a wind waker 2 as a launch title for the next handheld.

All I want from their next handheld is something different. The 3DS was a depressingly small change from the DS, which is fine for the most part as the DS was glorious, but that's not a boat they can ride 3 times.