Of course, they could always just relent and call it Wii 2 with minimal damage. They could even tie in the fact that they (hopefully) get 2 tablets operational in some titles. I don't buy into the argument that people would think less of it next to a higher numerical PS4. If anything, consumers are weary of the trend that the more numerical sequels = the more decline in quality...which is why Wii U is probably the best choice.
I understand your opinions. I do fear that "U" as a "modifier" isn't really describing something new or advanced, like um, "Advance" did with the Gameboy line, though. GBA didn't have that name problem, but that was before Nintendo started with all the SPs, XLs, Lites, etc. etc. I can see how an uninformed consumer would be confused by 3DS, though I wouldn't have predicted it at the time... And as was said, 3DS had its own problems before it caught it's stride so it wasn't just the name.
Keep in mind too that tons of Wii games have used Wii in the title with a "modifier." Wii Sports, Wii Play, Wii Music, Wii Party, etc etc. Not to mention hardware components like Wii Sensor Bar, Wii Remote, Wii Balance Board and so on. So it's understandable that some people are thinking the Wii U is some tablet controller coming out for their Wii. Anyone on NeoGAF wouldn't have the problem distinguishing, but a soccer mom or Average Joe might get confused.
The Gameboy name was very valuable when Nintendo switched gears in calling the DS the DS. So "Nintendo U" still isn't out of the question and hey, I like it. I don't know that it's really going to be a big deal if they stick with "Wii U" but I see the problem. Hopefully they work on the logo more and launching in black (or that silver mockup) might not be a bad move either.