You know, I think the Wii U is actually in a BETTER position now. Before, it was competing against people's imagination of what the PS4 may bring to the table. Now, it's concrete, in screen shots and trailers. Now, they are amazing looking trailers, yes. But if you put Watch Dogs PS4 up against Watch Dogs Wii U, are the graphics going to scream, you need to get the PS4 version? I'm doubtful. I think Nintendo is safely in good enough territory as far as graphics come.
Nintendo's real problem remains producing a steady stream of high quality games. Using Watch Dogs, again, it seems clear that if Nintendo can get the hardware sales, third parties will be able to port the games over.
As much as fans are salivating over the 8 gigs of ram right now, (and it is awesome news for Sony first party games), Sony may have a tough row to hoe if they are priced at $499 or higher. Third party publishers will have the same incentives as the current gen - port to as many systems as possible. So if Sony is significantly better than Microsoft, it may just mean you see Microsoft's system as the lead platform, with the PS4 getting better textures, framerate, resolution, etc., and the Wii U getting similar downgrades.
The important thing for Nintendo is that, compared to the Wii, getting a stream of down-ports from third-parties to the Wii U would be an UPGRADE for Nintendo, which missed out entirely on a lot of the big titles last gen.
Quick edit: Also, one other thought from last night - the PS4 conference showed once and for all how ridiculous it was for Nintendo to design a console around power draw and small case size. Has a single person said, "Well, those PS4 specs look impressive, but what about my power bill?" or "But how will I fit the PS4 case I haven't seen yet into my entertainment center?" Damn it Nintendo, why you so crazy.