They wont do that. Like it or not, the screen is here to stay.

i still dont know why u cant use a 3ds as wii u controller

As the Wii U is already very integrated there aren't many places to cut costs. Dropping the GamePad or the disc drive isn't a real option.

People who think that the Wii U isn't worth 299 US$ also won't buy it for 199 US$.

It is the other way round: if there are some games you want to play, it doesn't hurt that much if you pay 199 US$ or 299 US$.

they could cut it in half and sell it for 50% off everything. Everything. Including hardware :P

And Nintendo is right doing so. 

Nintendo needs to leverage the social and "user generated content" aspects which only are possible by the gamepad. 

The MiiVerse Art Acamedy Sketch Pad community is an example of what is possible. And Nintendo didn't release any courses for this title yet...

299.99 is the right price for a Wii U, the lowest I see the Wii U going is 249.99

Bingo.

Not only that, but the main reason I bet the screen is here to stay is because Nintendo wants ABSOLUTE control over the specs of their hardware (from the screen right to the processors). They have this with their handhelds, but not with thier consoles, untill now.

Dropping backwards compatibility?
Not sure how much it would shave off the price, and it might make many people unhappy, but it might be an option.

It needs more memory not less. The main way to drop the price is to get rid of the gamepad.