Iwata:

"If they decide to increase the spec numbers, will the consumers be able to realise the difference enough so that they can understand it's much superior to today's machine? And also, if they beef up the processing power, that simply means much more work for software developers to take advantage of those spec numbers. So I have to ask the question if that type of differentiation really makes sense. But I think further arguments must wait until probably next year, when they have finalised and disclosed whatever they are thinking about for the next generation of consoles."

Source: http://www.telegraph.co.uk/technology/video-games/e3/9328561/Satoru-Iwata-interview-Nintendo-rivals-are-already-copying-the-Wii-U.html

On Related Note:

For Sony Worldwide Studios boss Shuhei Yoshida, the Wii U, as with its predecessor the Wii, exists in its own bubble.

Shuhei Yoshida:

"Personally, I have always thought Wii was in a generation of its own," Yoshida told Eurogamer when asked whether he considered the Wii U a next generation machine.

Source: http://www.eurogamer.net/articles/2012-06-14-sony-wii-u-is-its-own-generation

A personal note I believe we all remember the famous Zelda Tech Demofrom E3 2011, if Nintendo releases first party content looking like that; then it won't matter that the Wii U isn't up to snuff with the PS4 and Xbox 720. With Games like Star Wars 1313 and Watch Dogs along with tech demos like UNREAL 4 and the Luminous Engine Iwata might get bit of shock when the next generation shows it's head next year; yes, yes these were running on high end PC's but you can bet you're ass they won't be PC exclusive games.

I don't really get the purpose of this thread, what are we meant to be discussing? I know they are in the industry but I don't see anything interesting really being said by either of them. 
 
As for that Iwata comment then most consumers don't see specs, they see better graphics, which is what the PS4 will undoubtedly have over the Wii-U. Of course they will tell the difference.

He sounds so delusional.

It's not just polygons that benefit for advanced hardware (not that users won't be able to notice that increase). Framerate, physics, effects, even scope all benefit from more advanced tech.

Of course, not every developer has to inject their games with more polygons, better physics, fancy effects, and massive scale just because they can.