Nintendo cannot and would not compete with X1/PS4 directly, irregardless of power. They'd just be the other HD twin with lacking infrastructure nor will to get into content bidding wars. They would have lost even more money on the WiiU than they have already in your scenario even if it were to sell the same. The problems of "Nintendo gamers only buy Nintendo games" wouldn't have gone away, 3rd party wouldn't be here, and Nintendo would just be stuck burning even more money.

The GameCube was their last attempt at being an industry leader in specs, and their then president made it clear that the company has no place to be competing on hardware. They aren't a mega-corporation, they are game makers.

Bolded: You mean like when Microsoft did a 180 on the DRM issues and screwed developers, or refused to let Bungie run free in their creative effort, eventually leading to the loss of the most important developer in their roster? Or like Sony and MS refusing to implement region locks for games on their hardware for two generations? Or like when Nintendo forced Dan Adelman off of Twitter and refused him to talk to Indie developers making interviews and rather insisted they talk to the corporate face, being perceived as "locked gate community" and a "brick wall", essentially being more soulless and faceless than anyone else in the console hardware race? Or Sony helping the Indie scene more than any others besides Steam?

Still fighting the good fight I see. I can't believe after all these years that you're still playing the same fiddle and insisting that Nintendo's lack of support is none of their own doing and relies solely upon the 3rd parties and MS and Sony taking it up the proverbial behind. Also still insisting that 3rd party games are of very poor quality and more or less worthless. Nintendo continued the Wii Fit and Wii Sports series and NSMB in the exact same formula, make Mario, Zelda, Donkey Kong and Pokemon their go-to franchises and have even started the whole evil DLC thing and resort to HD remakes and remakes in general and you berate others for rehashes and uninspired garbage? Such incredibly old and stylized rhetoric, I find it strange that you get so agitated by people who perpetuate Nintendo myths and generalize when you do the exact same thing yourself about others.

If you want to change your view on 3rd party games; you should buy a gaming PC, it's a completely different world.

On topic; no they will not, they're not interested in joining market movements or making the slightest compromise and haven't been for decades. 3rd parties will stay away and Nintendo will be left to carry their consoles alone with extended cost and development time.