I thought their philosophy was 'use withered tech creatively' or something? Is that a myth?
Why yes, it most certainly is.
Wii was what it was because HOLY SHIT, did the tech jump at the time cost a shit-ton of money that Nintendo didn't have at the time that prototyping started. Sony and Microsoft nearly lost their shirts that generation if they hadn't extended it for an extra few years to finally make some damn money. The tech for something powerful wasn't cost-effective (or power-efficient). Nintendo knew it and threw the dice that a controller would be enough, because given their situation at the end of the GameCube generation, they didn't have much of a choice. And lo and behold...
Wii U was them looking at console design from a "controller first" perspective because it was so successful for them the last go around. I mean, if you're successful with something, you want to try again, right? Selling things to consumers is a lot like gambling, if you're on a "hot streak", you try and make it work again. And they rolled a snake eyes this time. 3DS was the same situation, but faired better after a stumble at the start.
People extrapolating an ideology from these 2 consoles along with some misinterpreted quotes from Nintendo are really just trying to establish a narrative that they wanted to exist before it was actually relevant.
People have been saying Nintendo likes "weak hardware" since the GameCube, back when they actually were on par technologically with their competitors. The myth began just because they didn't release a spec sheet and gamers thought that meant they have something embarrassing to hide. And every word out of Nintendo's mouth about it since has been twisted into Nintendo refusing to consider high-spec hardware.
They haven't said that, but they have repeatedly talked about how their design goal since Gamecube has been to make a very small console.
http://iwataasks.nintendo.com/interviews/#/wiiu/console/0/0 (scroll to the bottom of the page)
They've had this design goal of a small console with low power consumption for over a decade.
No matter how efficient their engineers make their boards, with that overriding aim, their systems will always be underpowered from a gaming horsepower perspective. Especially when the Xbox One and PS4 are significantly larger both in power draws and volume (meaning better ventilation and the ability to drive faster hardware).
So while they've never come out and said "we want a weak system" ... they have said that they want a small, efficient and low-power system. Those things go hand in hand.
It's hard for them to have both a tiny footprint and hardware specs that attract third parties to port games to modern Nintendo systems. At least not when both systems launch in the same rough timeline.
The other thing I remember Nintendo saying (but can't find the source anymore) was that they wanted a small system so that "mom" wouldn't object to having it under the TV. Now I can't support that point with a source right now, but if I'm remembering correctly that reveals a pretty antiquated view of the nuclear family and the home economics dynamic.
You forget one of their other major philosophies, though: native backwards compatibility.
PowerPC chipsets were something they were saddled with in the design of the Wii U because it was the only way to reasonably achieve a backwards compatible design with Wii. And coming off of a console generation where you sold 100 million consoles and a shit-ton of games, backwards compatibility was most assuredly a consideration in the design phase.
But at higher capabilities, PowerPC falters at power efficiency, so they made it as low-spec as they could get a PowerPC chip to go with rendering games in 1080p at a reasonable fidelity. It still uses more power than the Wii does by a good country mile.
But at this point, with so few Wii U owners, native compatibility with their old games isn't a consideration they have to make. And other chipset architectures have made HUGE in-roads in the balance of performance vs. power efficiency. Heck, x86 chips aren't the greatest at that, but Intel still does better at this than PowerPC does when you get into the higher performance rates.