If you see it like that its competing with every system that is out now (so maybe the tag should be 99)
The Wii U competition will NOT be PS360 it will be PS4/720.
Nintendo will have a headstart next-gen and same like MS or Sony they will give a ferking shit about what the previous gen systems have for a pricetag if they release their new system.
Until the next Sony/MS systems come out, it WILL be competing with the current ones. If people don't see enough improvement over PS3/360 for the difference in price, they won't pay it. Hell, consumers didn't see enough of a jump from DS to 3DS to swallow the price jump.
And people do care about the previous system's price. PS2 flew off the shelves at $299, PS3 rotted on them at $599. Turns out doubling the launch price isn't a great way to go.
But, to follow your argument, the Wii competed with PS3 and 360 and didn't go anywhere near them in terms of price. Not only do we not know enough about Wii U, we know nothing at all about the Sony/MS systems that will compete with it.
They could be close in power and cost this gen, or someone could go the bleeding edge, high cost route. We'll see, should be exciting.