(Quality rant about Nintendo control gimmicks)
Ian Sane, While many core gamers can readily agree with the points you make, it doesn't change the problems Nintendo must face to stay competitive in this industry. One of the key challenges of this past decade plus has been differentiation...the factors that make one platform stand out from the competition.
Nintendo has tried the strategy to fight their competitors on similar terms with similar technology, types of games and yes, controls. Their key differentiator would be their own strong lineup of software. The GameCube, home to many fine games, was sadly a sales disaster for an entrenched company like Nintendo with few other revenue streams to balance a disappointing console business.
This, perhaps moreso than their stated desire to "expand the market", is why we got the Wii. They could not afford to go toe-to-toe with their bigger, richer rivals (one of whom willingly shoveled away billions over the course of 7 years or so) but they needed a differentiating factor to sell the market on their otherwise underpowered hardware. You may believe the system was a dud and a disappointment, but flipping through not just their console sales but their software sales, man I am inclined to disagree. If anything, had they not chosen the path of "gimmickry" they may well be on their death bed instead of sitting on a comfortable amount of cash and ready to kick off with this next console in an advantageous position.
Now this brings us to the Wii U and touch controls. Touch controls have now driven not only the most successful dedicated gaming platform in history (DS) but it is also the salient control method on arguably the largest gaming platforms ever seen (mobile platforms, specifically iOS and Android). If touch screens really are "not so hot" as a game input method their must be an awful lot of really foolish people out there who have been cheating themselves.
As someone who has enjoyed games on his DS and now iPod Touch immensely, I am of course inclined to disagree. Rather, I see that UPad as both a step Nintendo must take to separate themselves from rivals but also as a logical progression. A majority of customers are now familiar and comfortable with touch screen controls and to omit them from a new game platform may now seem archaic...I am super curious how Sony and MS respond because they have other big challenges of their own to address.
(BTW, I largely agree with your sentiment about the core gamer UX on the Wii...for one thing I think they communicated terribly with their most loyal customers, for another it is a shame they did not have the confidence to implement motion+ from day 1. Maybe it could have enhanced the UX beyond just novelty status for core gamers? Oh well.)