It seems like whatever Nintendo does, they can't win.
They made the GameCube, which tried to directly compete with Sony and Microsoft, yet developers and (most) gamers shunned it. Then Nintendo made the low-powered Wii, which tried to bring in a new audience of casual gamers. The Wii sold very well, but the "core" gamer audience wasn't there (neither were the developers).
Now Nintendo wants to go back to competing on a power level. Why do they think it will work this time?