The basic problem I see is that Nintendo don't have the capacity to provide as much content as is needed on their own, and they haven't had the relationships with third parties since the SNES days to fill in the gaps (and this situation gets worse as more competition enters the market, it used to just be Sega, then Sony, nowadays it's smartphones and Facebook gaming etc). Simply firing Iwata will solve exactly neither of these problems. No CEO can magic high quality product out of thin air, and this has been a problem since long before he was around.
IMO they might be doing better now if they abandoned the twin handheld/console strategy and went all out on one system. As far as I can tell, they're spending so much time and resources bringing the 3DS up to speed, there's nothing left for Wii U production. Both of these systems are also out in the wild long before they were ready, particularly the Wii U, which clearly Nintendo isn't ready for both with the lack of software and the obvious signs like Miiverse and the Wii U OS clearly being in a beta state.
Worth noting that Nintendo/Iwata's failure with the Wii U isn't actually that it should have done better being the successor of the Wii, because the Wii had flatlined long, long before the Wii U even existed. Which probably explains the above. The real failing was losing momentum in the latter half of the Wii's existence. The Wii U is coming "hot" off the heels of absolutely nothing.