Interesting, so if we take the rumors as true, etc does it seem more like WiiU/PS4/X720 are more like 6th gen than 7th gen?
I mean the difference like Dreamcast to PS2 to GameCube to Xbox and not the difference between Wii to PS3/360.
There's no clear cut answer for that because generations are defined not by a threshold of acceptable performance but by what is standard. No developer liked the PS2 that generation, not even Naughty Dog (no, really) but they had to work with it... so, "bugger" and they did. DC never really took off the ground as standard; multiplatform for it was PSone games running in 480p with extra bells and whistles; if it had though, polygon throughput would have been halved in multiplataform games as well as limited to 1.2 GB's of disc storage which would have helped Gamecube actually.
Anyway, Nintendo hopes that Wii U becomes that (PS2) standard by selling quite a bit and not being as casual focused as the Wii and by having a modern GPU this time around, meaning that even if the performance is reduced, cross platform using the same base tech is always doable.
If it does get accepted as that minimum denominator then games will be made first and foremost with that standard in mind and then upres it and enable some extras. That way multiplatform games could have 1080p standard on X720/PS4 and be held down to 720p on it, perhaps with some other downgrades but doable nonetheless. That's their best case scenario, that best case scenario could also extend PS3 and X360 lifespans on the perception of them having similar capabilities though, and that's not good for Nintendo unless ports start to improve.
The worse case scenario is, developers focusing on the x86 optimization and deprecating on the PPC branch support for their tech right after PS3 and x360 die, relegating the Wii U to be forever technologically bundled with them (like happened with the Wii and all further evolutions "custom made"). Other problem is if most PS4/X720 games are not made with Wii U and 1080p in mind (for their spec) then that'll make parity harder and harder, as porting will mean taking things away from the Wii U version rather than simply adding it to the higher spec'ed versions.
Basically making games works out one way, forward. Backward albeit usually doable is a butcher job.
From the looks of it though, it definitely looks like Nintendo undershooted; and that this time around Sony and Microsoft aren't actually overshooting it (they're perhaps overshooting on the RAM department though).
There will be a point where undershooting to a certain extent won't be a problem though, but it's not up for Nintendo to guess that but to conjuncture (basically if you always do the same thing you're bound to be right, sometime); be it because developers really need the multiplatform approach seeing development costs are always increasing (and after the Wii and DS Nintendo leads in mass appeal for the time being), be it because due to those development costs increasing, at some point going all out on production values won't really be a good idea for most games (just like it's not economically viable to invest in a mobile phone game that really pushes the hardware and so no one does) developers will just have to accept what's good enough and go for there.
Of course, in an artistry driven industry that'll only happen when situation is so severe that not being business minded means certain doom (we've been further from that); when they're made to by higher ups (PS2 scenario) due to said machine being the only contender for lead platform (not gonna happen with 2 consoles being 86 like the PC) or when engine and asset scalability works really well (Tesselation could work wonder's there, but as with any new tech time will tell how it's gonna be used). In the end though, there's always pressure and undermining by settling for less. (and less power is less, for the developer community)