Graphics aren't even the issue. We always knew the Wii U could pull 1080p and it doesn't get any better than that. I have no doubt the Wii U GPU is powerful, but that only handles graphics. The developer in the article Caterkiller posted mentioned Dynasty Warriors and said the Wii U's CPU was too slow to handle all the characters and stuff that was going on. Graphically speaking it will look awesome and be in HD, but its going to either run slow or stuff will have to be cut out because the CPU can't process it.
You know what looks really awesome? A painting. But a painting doesn't move. It looks pretty, and that's about it. If graphics are all that mattered something that can display a painting in 1080p is good enough, but if you want fast paced action, moving characters, explosions, etc. it seems like the Wii U's CPU isn't able to keep up. I'm not saying this. This is what the developer in Caterkiller's article said.
I'm sure with optimizations a developer can maximize the Wii U's capabilities and squeeze a lot more out of it, but as Ian pointed out even though they can do this they most likely won't. They could have done that with the Wii too, but they didn't. So why would they suddenly start doing it on the Wii U? History has shown they aren't going to mess with optimizing multi-platform ports on Nintendo hardware.
In fact, this problem isn't even limited to Nintendo. Look at the PS3 and its port of Skyrim. With a lot of work and optimization Bethesda could have made the game work smoothly on the PS3 despite its limited RAM. But they didn't. And I doubt they would have done it for the Wii U either.