People seem to have no problem comparing Wii U sales to the GC or bringing up "x series didn't help the GC" despite those different market pressures...
Different comparisons entirely. You can compare the GCN sales to Wii ones as a baseline for how a lower-performing console is doing in the marketplace.
But to say that Nintendo should cede the technological arms race forever because "the Gamecube competed with Sony/MS and failed, and the Wii didn't compete and succeeded" is a really simplistic analysis. Especially since the areas where they differed from the competition (the mini-disc medium, controller functionality, aesthetics, release timing etc.) were pretty good reasons why they failed.
Consumer values change. Nintendo thought they were playing the same game as 2006, yet each generation has its own rules and the audience they nurtured basically abandoned them for greener pastures. One of the downsides to basing their product around a underpowered consoles and an accompanying controller/"gimmick" is that if that gimmick doesn't pan out, it puts them in a bad position. There's no wiggle room for them to position the system as something else.
Not to mention, while they stuck to their "underpowered" technology philosophy, they violated one of the Wii's virtues in being cheap to produce. The very controller the Wii U's based around is contributing to their loss on every unit sold, to no discernible benefit. The consumer isn't valuing it.
While the Gamecube might have burned them before, it doesn't seem like the continuation of the Wii Strategy Part Deux is doing them any favors on the console-front either. This might have been the right time to - if not exactly match Sony and Microsoft feature for feature - at least make an earnest attempt, but with a Nintendo touch. Instead, we have something that feels totally half-assed and has no room for future-proofing or changing direction.
