Wow, the Wii U = epic fail and I won't be surprised if we see management on the chopping block because of this--both in Japan and the US.
Nintendo's strategy is a mess to put it bluntly--they need to decide if they want to be a game developer/publisher first and foremost or if they want to compete as a first-rate gaming platform/technology vendor. Their problem is that they are trying to be both, but you can't be a first-rate gaming platform without developer support--no matter how awesome your branded titles are and how many kids and parents buy your games, without 3rd-party support you will never beat Microsoft and Sony.
On a side note, Nintendo probably has the best back-catalog of game titles/franchises and they should be milking it for what it's worth by making those games available on every platform. It would be awesome if they Nintendo expanded the Virtual Console to be more like Steam--sign up for an account and purchase the games you want once (with the ability to download/play them on up to 5 devices including Nintendo Wii consoles, DS handhelds, Android/iOS devices or PC web browser) or pay monthly for an all-you-can-play plan that gives you access to their entire back catalog and any 3rd-party titles they can get rights to.
Nintendo should have an official Virtual Console app for iOS/Android. Do they think this would cut into their profit margins? They can sell an official controller for their app with a decent margin on the hardware. They can get around the Apple tax by not having in-app billing and not selling titles through the iOS app--Nintendo can keep all the profit themselves. Unfortunately, their current strategy is to limit the market for Nintendo games to their own crappy hardware.