I have never heard of anyone making this mistake before. It is either just dumb people in the gaming press, or maybe it happened over in the US? I have never heard of any real people making that mistake, not once.

Even someone who knows almost nothing about gaming can deduce from the boxes that it is a new console which includes a Gamepad.

The Wii U is basically just an hd Wii. I don't think it was ever going to sell apart from the hardcore fans. The casuals already had their motion fill.

I only have anecdotal evidence from most of the casuals/Wii owners I know (which is a significant amount) and when I recently got a Wii U it was often the same result:
When they see it:
Person: "What is this? A new Nintendo system? When did this thing come out?"

or

Person: "A 'Wii U'? Is it like the new Wii Fit balance board or something? Never even heard of it."

Note: Ive only had my Wii U since late Jan and those are still the general answers I get from causal/Wii Owners -of whom are very much aware of the PS4/X1.

Just my experience anyway

I think people give way too much credit to that whole confusion thing. Wii U as a gaming system has been rejected by the market just like the gamecube (was that confusing?) and the N64 before. Sure, the "people are confused"-cards, "There was no marketing"-cards, "Marketing was bad"-cards and the most beloved "it´s a conspiracy by ea and ubisoft"-cards are easy to pull and deliver a more or less satisfying excuse for the terrible sales the Wii U is pulling to those who want to believe.
Anyways my bottom line is this....Could the BEST name in Ninendo History have changed things? Maybe 10% more units sold. Could better Marketing have changed things? Maybe another 5% more (With seriously extensive uber "See Sony/MS this is how you do marketing" billion Dollar campaigns).

Though the Wii U is a bad name, they have been doing this with the Game Boy -> Colour -> Advance

I find the 'new' 3DS to be a lot worse..

Gamers will be able to tell the difference between the Wii and U but the 'new' 3DS or a new 3DS will still be confusing, even among gamers.

A lot of people say the PS4 is just a little prettier graphics PS3, so probably having Move as standard not DS3 would make people say it differently (maybe even on the positive side).... although I preffer how it is even having move and the camera.... At least WiiU accepts the Wiimote as well.

I have definitely talked to a few people who didnt know the wii u was a whole new console. so yes it's definitely a factor

Hiku... differentiate PS1,2,3,4 apart is easy on that... I'm saying that if the confusion was such a big problem how would the consumer associate that PS1 or N64 or Dreamcast was better? In brazil a lot of people only know of Snes and have no idea it meant Super NES (we mostly got botlegged versions of the console and games for NES), what is better a Master or a Mega system? I think the amount of dumb buyers is really small for that to be the biggest part of the problem... on the parents buying gifts for the kids I agree it can generate some problem on the SW, but when Stores just have the console itself since Wii isn't getting space on shelves anymore I don't think that is influential...

The most I can give for the confusion is that people that don't game, don't inform themselves and wouldn't be able to easily differentiate Wii from WiiU. But that in itself shows they were a bad public to get anyway since they don't care much about gaming and buy a lot less SW than other costumers...

no because PS3 was HD unlike the Wii. The Wii lost momentum long before the Wii U came out so it was clear the general public had moved on. Nintendo need the next big thing but it looks like many other companies are ahead of them with VR and AR. 

Painful ....

Anyway OP, I agree, I think most are aware it's a new system.