I worked retail around that time... and let me tell you there are a LOT of people who go to buy consoles knowing very little about them, and a lot of people who wanted to buy a Gamepad for their Wii.  A lot of customers are stupid.  If you want to make a product that appeals (hopefully) to a mass market, ill informed people are going to be a big part of your market, and if you tell them all to go home, you're going to go broke. 

I think it's probably a fair inference, but to make it a conclusion would require more information we have. We really have no way to isolate the Gamepad as a variable, so all we really have are our intuitions.  

Wii HD in 2009/2010, then Wii U, with different name, much better specs and GamePad just as an accessory in 2013.

2009 was Wii's peak year, and 2010 was really strong too... A console revision was completely unnecessary at that point.  

About Kinect being a failure: We just had the launch aligned gap chart between X360 and PS4 on VGC. There you can clearly see the power of Kinect.

For companies leaving money on the table: Well, that happens. Companies doesn't always act rational. That is because they are lead by people. And in the case of gaming consoles it is even more extreme, we only have three competitors. See, in the car manufacturer market you have about ten competitors, and still it needed an outsider in form of Tesla to kickstart electric cars.

Changes with only three competitors are even more difficult. They just can do what they always did, and nobody complains. Diving into a new and risky market is difficult. So Nintendo tried their hands with the Wii, had massive success and were trying what to do. They develop Wii Music. And Wii Music was a game with no real concept behind it except somethign with motion control and music. And so it failed. Miyamoto unable to recognize his own failure in designing the game decided it was because the market moved on from motion control. And so while the games still in development at the time Wii Music came out and released in 2009 (Wii Sport Resort, Wii Fit Plus, Mario&Sonic at the Olympic games) were much more successful Nintendo somehow decided to move away from motion controlled games.

About Just Dance on Switch, it is a bit difficult as VGC stopped tracking sales of games at this point. What we know is only, that the Switch version of Just Dance is the first version beating the Wii version in sales. The limited sales data seems to indicate that the series is on an upswing on Switch, as JD 2019 sits at the same sales as JD 2018, although VGC stopped tracking just months after release of the later version. The sales curve indicates that JD 2019 did go on sell much better. So my indicator game Just Dance seems to suggest Switch has a devoted fan base of motion control games, although Nintendo didn't make a push for them until RingFit adventure. And we all know Wii Sports did even better than Wii Fit.

More options for consumers who wanted HD option, no different really than PS4 Pro which came after 3 years of PS4 selling like hotcakes.

Not a thing different. No WiiU no switch. Things worked out pretty much perfect.

A revision isn't just about sales... But can increase profit margins.

Sure, but how is an HD revision which would probably drive up both hardware and software costs increase profit margins?  

I think they shouldve copied the ps move navigator controllers and released a wii2. Wouldve been a much better transitional move and allowed for a price drop. If they loved the gamepad so much then release it as an accessory bundled w nintendo land as almost no other games used it well.

Newer chips don't always cost more, they can often be smaller, faster, cheaper to manufacture and require less power delivery and cooling reducing the overall bill of materials.