I think they should just remarket it. First of all drop the name Wii U. Price drop as well, even if its just by $50. Most people think its just an expansion to the Wii. Its confusing. More games would be nice. Where is Metroid? The new Zelda? Lastly get 3rd party back on board.
Do you know how hard it would be for Nintendo to suddenly rebrand an already existing console?
As much as I dislike the name "Wii U" (should've just called it the "Nintendo U") there's no undoing that. They have to live with it.
Rebranding it with another name would mean that they'd have to pull ALL the games and accessories and consoles from the store shelves and replace them with ones with the new name on it.
It would be more profitable for Nintendo to just ride this godforsaken train called Wii U through the next 2 or 3 years than to replace it with a new but same one.
You're right about people thinking it's a Wii expansion, though. That's because it's called "Wii U", and not something like "Super Wii", "Wii 2" or "Nintendo 7".
With the old name in front and the new name in the back it looks (at least to us westerners, don't know about good ol' Japan) like it wouldb e an expansion instead of a new console.
The SUPER Nintendo Entertainment System was pretty clear in that it's not just a Nintendo Entertainment System but it was something better, something new. It was SUPER, not and not a "Nintendo Entertainment Machine" or something.
The Nintendo 64 was something else from the SNES because it had a completely different name. Same with the GameCube and Wii.
"Wii U" was simply the most unimaginitive and confusing name they could've given to their Wii successor.
Doens't mean they can change it now, though.