Have you seen Wii U's sales?

Have you seen the attach rate of 1st party Wii U games?  The games are selling fine to people who actually own the console.  Problem is they're not branching out to other gamers in other areas.  Xbox owners aren't going to buy a Wii U because Zelda looks like a tech demo from 4 years ago.  Nintendo needs to do other things to attract buyers (create new IP and seduce 3rd party studios), not mess around with IP that has stood the test of time.  There's no evidence to suggest that the market is losing interest in the Zelda IP. It's had its ups and downs ever since 1986 and has never had a game sell exceptionally worse than the rest.

Wii U's hardware sales show that Nintendo does not know what they are doing. They are out of touch with today's market. I wish it weren't so, but if they knew what they were doing they'd be in a much better place than they currently are.

I agree, but you're kind of ignoring what I'm saying here.  They're out of touch in many ways, but handling their own IP is something they're still doing right.  They just need more of it, and they need other studios to be contributing theirs.

My point is that changing Zelda to appeal to people who probably aren't going to buy Zelda anyway, regardless of what it looks like, is definitely not in Nintendo's best interest.  I mean, Nintendo could make The Legend of Zelda: Elder Scrolls if they really wanted to I guess, but they would lose just as many buyers as they would gain and they would be trying to beat studios like Bethesda and Projekt RED at their own game.  Not going to work.  Don't try to make games like Bethesda.  They're better at it than you are.  The better option is to get Bethesda to make games for your system.

Which, you know, ship has sailed on the U already because of specs and architecture, but yeah.

I don't think it's a matter of all or nothing; the Wii U Zelda demo of 2011 didn't look like The Witcher or Skyrim, it was still classically Zelda despite the slightly darker presentation. I reckon you could find a good middle ground instead of selecting a style that turns off a whole segment of the gamer population.

Maybe, but I still don't think there's any evidence to suggest that an art style more like TP or the tech demo would sell any better.  OoT and TP are the best sellers, but not because of their art.  Skyward Sword and Wind Waker both sold better than Majora's Mask, and all three had limiting factors in the market that OoT and TP didn't.

I think the marketing department is where they are more out of touch as opposed to the software lineup. 

https://www.youtube.com/watch?v=7dbGJieRaH0 https://www.youtube.com/watch?v=QsbeQeiwW9o 

THAT ad campaign could hamstring any console, lineup be darned.