So how does Nintendo dumping the Wii U and pushing out a new system change this? You still haven't explained how early adopters of Nintendo hardware are going to buy into a new system after Nintendo jettisons the old one. And you still haven't explained how gamers are better off for having fewer games in exchange for better corporate bottom lines. That, to me, sounds like the gaming equivalent of trickle down economics. If I were an investor, maybe I could see your point. As a gamer, I don't see how I'm worse off for having Zelda U, Xenoblade and other games to eventually play.
I haven't explained it because you clearly are not understanding my point. I will state this for the third time: I am not suggesting that the Wii U be completely abandoned, and that Nintendo make zero new games for it. I am suggesting they invest just enough to keep current owners happy, without investing more in to trying to gain marketshare. Let the system ride out its life as the Gamecube did.
Let's say Nintendo's next system launches in late 2016. Well, Nintendo has limited resources. Any and all employees invested in continuing to push the Wii U are by definition not working to set Nintendo up for a better situation next time around. Figuring out what went wrong with the Wii U and how to avoid failures of this magnitude in the future is not an easy task, and getting it all sorted out will take a huge portion of Nintendo's resources.
For instance, if Nintendo wants to set up a network infrastructure for the Wii 3 console that not just competes with but bests PSN and XBL, they need a large quantity of employees dedicated to that process right now.