I'm trying to understand why Yamagami said this even though there's a FE game in co-development with Atlus.
Do we know the context of why Yamagami said this? Was he asked? Producers tend to paint themselves into a corner when asked questions they're not prepared for. Miyamoto does this all the time. It's a rigged game for them. We see cherry picked quotes all the time. Knowing where it came from would would help in understanding what it means.
Yamagami could be trying to drum up support for such a game. Awakening outsold both Path of Radiance on GameCube and Radiant Dawn on Wii individually and by a fair margin (according to the link in the article). Fire Emblem U would cost more thus requiring more sales to make it worth the trouble. Yamagami's estimate is still less than what Awakening sold but more than Path of Radiance so what he's saying makes sense. Fire Emblem U would need better sales than the previous console installments, which probably had budgets close to Awakening anyway. A higher budget requires higher sales; that seems fair to me.
More importantly, while Wii U is in dire need of games and Nintendo has absolutely dropped the ball so far, ask yourself if Fire Emblem is really the kind of game that will satisfy the masses. It's a good game to have, but it's one meant to supplement an already healthy lineup, not be an unhealthy one's cure. Sure, this shouldn't be an issue, but it is and there's nothing to be done with what's already done. How do you fix it? Not with Fire Emblem. If Nintendo is going to spend years developing a game, ideally they want one that reaches as many people as possible. Intelligent Systems wouldn't be sitting on their hands, doing nothing. They would be making
something that hopefully has longer legs than Fire Emblem.