Nintendo has stuck with the "good enough" standard when it comes to console hardware and Wii U won't likely be the exception. Whatever the console lacks in graphics, it will make up for with its unique capabilities. This is similar to how 3DS is not as powerful as the PS Vita yet capable of doing 3D without the glasses. The platform just has to be strong enough to make whatever gimmick Nintendo wants to focus on work effectively and smoothly. Devs will be attracted to it. Of course, if third-party games don't sell well, then Wii U is going to suffer almost as badly as the Wii did - just without the much cheaper development costs.
Even if Wii U is essentially like the 360's HD visuals, then at least it will likely have better performance. It probably has less to do with "future-proofing" the console and more to do with making it capable of handling the seemingly stressful tech involved in getting the console to work with the UPad without a hitch (kind of like how the 3DS has to be strong enough to render the games twice in 3D). For all we know, Wii U may even be capable of handling UE4 if its scaled down. In any case, it can't be as bad as it was with the Wii's graphics where it wasn't only behind the 360 and PS3, but also lacked HD output and even shaders.
I think the reality is Nintendo won't be getting the strongest third-party support. Third-parties have been burned by Nintendo before with its past home consoles to put all their eggs in one nest. Even when third-parties offer multiplatform games on Nintenod consoles, the case is often that the other versions sell better. However, in all fairness, a lot of devs don't even give Nintendo versions of their games a chance to be successful to do poor marketing and overlooking them in favor of a different platform's version. Nintendo really just needs to make Wii U compotent enough so that it qualifies for the LCD for third-party multiplatform support. It may get lucky and serve as the lead platform for some current-gen games.However, being lead platform once Xbox 3 and PS4 enter the fray probably won't happen. That's naturally where making it easy to port games to becomes even more important. After all, most of us recognize how the third-party exclusive is becoming a thing of the past. Beyond just making Wii U an easy platform to port third-party software to, Nintendo's already solved the issue of dual analog controls so developing for a specialized controller won't be nearly as much of an issue as it was for the Wii. Even if devs feel like they're ported games need to take advantage of Wii U's controller, most of it seems like it can be implented with ease. The most basic capabilities would give Wii U a slight advantage even if Wii U version of the game cannot visually compete against Xbox 3 and PS4. Quite frankly, that's the part Nintendo hopes it can rely on third-parties for.
Then there's the online service. More and more it seems to be like graphics are the least thing Nintendo is going to be focused on with the Wii U. Yes, they'll make impressive games and take advantage of their own hardware (as they always do), but establishing a more flexible online service is a bigger priority. It's going to be easier for gamers and developers to be more accepting of Wii U's lack of visual punch over another outdated home console online service. Fortunately, we've already seen signs of Nintendo moving forward with a better online service plan that's account based and capable of using the controller for voice chat, video chat,and internet browsing using a virtual keyboard on the touchscreen.
