Sounds like it will be more than $25.  Seems like an attempt to reattract the Wii crowd, but then it prevents those people from later investing in more traditional franchises like Mario Bros and Animal Crossing.  I don't see any advantage in fragmenting their fanbase like that.  Obviously I don't know enough to really judge, but it's hard to see the benefit of fragmenting your audience like that.

Desperate Nintendo is best Nintendo.

I don't think this is one product, probably will be a line of products. Maybe even things like cook books and vitamins/health shakes from Nintendo.

Forcing people to have to buy an expensive console to use say a generic Nintendo fitness program would only serve to limit its appeal. 

As long as it generates money they can then be spent on amazing Wii U games, I'm happy with this.

but is not a game device. I can't see the problem

True, it may be a whole slew of toy like products with health benefits like the Ultra Hand and other mechanical devices Nintendo produced in the 50's and 60's. But i guess we'll get more details in the near future.

Wasn't the DS the same strategy? A blue ocean third pillar to shore up a struggling home console?

Limits the appeal of the fitness program, but increases the appeal of Nintendo products.  The huge surge in franchises like Mario Kart, NSMB, Animal Crossing, and so on came from those Nintendogs, Wii Sports, and Wii Fit fans.  Once the hardware was trojan horsed into their homes, it helped other series and Nintendo in general.  If the system is anything like a traditional console it will cut off the incentive to ever invest in Wii U hardware which will prevent any sort of spillover into Nintendo's broader portfolio.  If the casual fans wind up with this new hardware, and hardcore fans wind up with a PS4 or XBone, that leaves a very narrow window for the Wii U to appeal to.   I could be totally wrong since I'm basing this off very limited information, but it seems counterproductive to their core business. 

That was the theory, but it didn't quite turn out that way.  The DS basically shortened the life of the GBA significantly,   If the new device takes off, I'm not sure they'll keep the old one up.  With the Wii U, it would be easier to pull the plug.

Ya know, when you look at the success of Wii Fit, and also the surprising sophistication in Wii Fit U, I can actually understand their thinking...

However, I think the problem is that they're overestimating the desire to get fit. This isn't the old days of drafts and militia, people are weak, slow, and fat in comparison! I think this is a good idea in theory, a bad idea against my experience with society, lmao