Ok, I'll put it this way:
The Wii U will "fair better" in the next gen due to it being able to run the amazing looking games that PS4/Xbox 3 will be able to run in a scaled down fashion. Those ports will still look "next gen" enough to show a nice gap between the last gen PS3/Xbox 360.
The Wii U is capable of DirectX 11 type effects like compute shading, it uses an Out of Order Execution CPU, it has a DSP Chip that if used correctly can off load even more from the CPU and a huge amount eDRAM. It's a next generation console that can produce next generation graphics especially in exclusive "made from the ground up" games and even in port downs with scaled back effects. How is that not fairing better than a port from Xbox 360? I'd say it is a mile better in comparison. This is why Iwata is not too concerned about having some huge gap this time in graphics like they did with the original Wii.
Here yet again, I'll use the Witcher 2 example. Xbox 360 vs PC
http://www.eurogamer.net/articles/digitalfoundry-the-witcher-2-tech-analysis
The PC rig that Digital Foundry is using is an i7 Quad Core running at 3.33GHz and a brand new GTX 680 that all together more than crushes the Xbox 360 in terms of power by a huge margin but the effects and look of the game don't seem way too different. Simply the Xbox 360 has less and PC more in terms of graphics but if someone were to play the Xbox 360 version by itself (which they have already noticed) it looks pretty damn impressive in it's own right.
Another point to consider is that the Xbox 360 isn't capable of some of the effects that the high end gaming PC is using in this comparison and it still looks pretty good. The Wii U on the other hand in comparison to this same high end PC, IS capable of all the effects the PC version is doing due the modern GPU (recommended PC requirments for the Witcher 2 was a Radeon 4850 with 1GB), granted it would need optimizing and some scaling down of the effects in terms of quantity of effects but all the graphical features would be there. It's funny how some of the people here down-play the importance of optimizing code on these games made for different architecture. Without optimizing a game (especially a port) you're going to need way too much raw power to blast through the differences, and for a console it's just not going to happen that easily.
This Witchter 2 example is what the gap between the Wii U and PS4/Xbox 3 will most realistically look like in a worse case scenario in my opinion. Wii U ports will look great on their own merits, but of course side by side comparisons would show the differences between the consoles.
The next gen is already shaping up to be about GPU features and what engines developers can use to create amazing looking games. The Wii U has a next gen GPU feature set and it has the engine compatibility as well. All these things are going to equate into "close enough" parity to whatever Sony or Microsoft releases in the future.