They've definitely made some early mistakes with the Wii U, but I don't think that spells outright doom for Nintendo or the console. I also think that people are grossly over estimating how powerful the new systems are going to be. The Wii U will undoubtedly be the weakest of the three, but the gap isn't going to be as big as it was between the Wii and the PS3/360.
I think the gap will be, from a technological standpoint, just as a big or even bigger than the PS3/360 vs. Wii (in terms of gpu, cpu, and RAM), but it won't be nearly as immediately apparent when looking at a game's visuals. The Wii U is going to be flat out incapable of producing a lot of the effects and AI routines we're going to be seeing with the new consoles, but it will be less noticeable for the casual crowd because games will still look pretty good on that machine compared to how jarringly old the Wii's visuals looked.
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