Iwata should have seen the writing on the wall in 2008/2009. Yes those were two of the best years for the Wii, but he knew that there was going to be absolutely nothing in the pipe for three/four years after that. That is when massive expansion should have been fast tracked, including opening new internal studios as well as external acquisitions.
How different would the Wii U's launch window have been if Nintendo had made the moves that Square did with regards to western developers? Just as an example. Hell, Nintendo was riding so high with so much cash back then, they could have probably bought freaking Capcom.
I know Iwata or whoever has said in the past that buying studios doesn't work because the talent leaves. Ok then, contact "star" developers and let them set up their own studio under you. Give them direction, but also give them freedom to make them happy. At the very least, work closely with third parties and give them your IPs. It's nice that Platinum is making W101 and Bayonetta, but why aren't they releasing Star Fox instead? I hope the shit show that was Other M didn't scare them away from this tactic for good.