Agreed. Not having a $300 Wii U bundle with LEGO City was a miss. For sure. ZombiU bundle has had a negligible impact on hardware sales.
I think it's best they keep Iwata for now. If he falls short of the $1 billion profit next January (which I think is unlikely), then he should be replaced. I mean, it will have been Nintendo's third year in a row of missing forecasts if they can't achieve their goal this coming year. This year will either prove Nintendo's business model is still viable, or it will prove that things need to change.
Iwata has said ten first-party 3DS games are releasing this year. A high mark, for sure. But this signals that he knows it is make or break. If you can't achieve decent profitability with ten big releases on a two year-old platform then you will have to admit that the business model no longer makes sense. Ditto for Wii U. If 3D Mario, Wind Waker, and Mario Kart fail to turn Wii U into at least a modest success come the holiday season, then clearly there is no longer any sense in the business model.
I happen to think they'll reach their profit target and maybe even exceed it. Pokemon X/Y and all of their upcoming Wii U games should turn both of their systems into money printers, provided they don't make a price cut on the Wii U just as a short-term fix. It would destroy any hope of profitability. They can't simply rely on the 3DS half of their business to carry the weight of the entire company. Both system's ecosystems need to be healthy. If they make it through this year, then I think they'll be fine.