I'm pretty pessimistic about the future of games, but even I can't accept this frankly dystopian vision of the future. I'll address the bolded points.
1. There was plenty that Iwata could have done, quite obviously. In another world, there is a Nintendo that came up with a better idea than Wii U, gave it a better name, launched with better flagship software than Nintendoland and came in at a better price point. That's just to begin with. In that better world their home console is not cratering the way it is now. Maybe it's not a huge success, but the Wii U is a function of terrible decisions piled on top of each other as much as anything else.
2. Of course Nintendo could go third party. The transition to PS4 development would be massively easier for them than the transition to phone/tablet gaming. One is an entirely new paradigm of gaming that as you point out does not suit most of their franchises. The other is just learning a new architecture, licensing an engine and making higher quality assets. There are 160m PS3s + 360s out there. There will be plenty of next-gen consoles sold. They could easily go, or could have gone, third party. I believe they probably one day will.
3. I don't think that there's any guarantee whatsoever that the new CEO forces Nintendo into mobile gaming. Shareholders aren't stupid - they must see that
a) It doesn't suit Nintendo's catalogue
b) They don't have the skill / expertise in that area, and it would take two years minimum to acquire,
c) You can still profit making software for PS3/4 and the Xboxes
d) You can still profit making handhelds if you don't have a home console albatross weighing you down
e) The mobile market is disastrously over saturated and very few companies are making money. You're throwing the dice as a new entrant to that market. You're also destroying the dollar value of your software forever once you start selling it for 5 bucks or less.
I'm not saying it won't happen. I'm just saying that painting that as the inevitable consequence of a new CEO is ridiculous.
Look regardless of the Wii U's tactical errors - here is the reality - the audience is gone. Their primary profit center - the true source of the company's tremendous cash pile - handhelds - are going extinct, and Nintendo is bleeding money trying to keep it alive. That's right - the 3DS - not the Wii U.
The only territory where Nintendo is making a profit on 3DS hardware is Japan right now - and they are most likely going to introduce the 2DS there in February to sustain sales momentum and hit EOY targets, which is going to eat into their weighted margins in that region.
Instead of people understanding this, they are playing make-believe and imagining useless permutations of better online or account systems or more power or evil Iwata and trying desperately to convince themselves that if Nintendo did what THEY wanted, it would restore the company to profitability.
The traditional Nintendo audience - the ones that bought 3 DS'es and 3 copies of NSMB is gone - they don't want to own a console and neither do they want to own a handheld - they want to own an iPad or they want to play Puzzles and Dragons or Angry Birds on their smartphone. They don't want to pay $50 dollars for Mario anymore when they are conditioned and used to paying $1 for a game.
Replacing the CEO would be about killing traditional packaged software and going to where that audience is - not doubling-down on expensive HD games on the PS4/XBO with low gross margins or releasing games for PS3 (terrible idea). It would be utterly insane for Nintendo to bet that their primary audience - children - and their parents would buy a $400/500 dollar console to play HD Mario when that entire audience is already using tablets in the West and most tablets will be capable of outputting HD games in under 12 months.
That said, Nintendo wouldn't do well in the traditional mobile space. They provide a unique experience and hardware is an inherent part of that. That is why as I've said before - the next step for Nintendo is to release a proprietary tablet, with Streetpass and physical controls, with Miiverse, NicoNico (which they recently invested into), Nintendo's eBooks marketplace (which was the subject of a lot of press last year), Nintendo animation (Pikmin anime, Pokemon TV shows), a variety of internally-developed F2P games, and the ability to buy completely traditional games as well, sold for $200 dollars (generating about $80 of profit per device). The tablet market in Japan is still wide open and Apple by no means is dominant yet. At half the price of an iPad Mini Retina, such a device has the potential to outsell the DS and they will never have third party issues ever again as the development tools would be standard Android or iOS development tools.They could do a great job curating content and really ensure that it is a great gaming experience.
That is a device that parents would buy their children. It would have good parental controls, a child-safe social network through Miiverse, and finally, it could be subsidized with a data plan in markets like Japan (in the US subsidies are going extinct and Apple is feeling the pain).
Nintendo could easily erect it as a third pillar, then release a follow-up dedicated handheld device based on the Wii U Game Pad to replace both the 3DS and the Wii U. They'd effectively capture their traditional audience again with a child-friendly tablet that contains lots of F2P games while possibly turning a profit on their ever-shrinking enthusiast gaming audience with a Wii U Game Pad-only hardware.
Iwata has hinted in the past that Nintendo is working on a tablet/smartphone product - it was in the Q&A some time ago - so it's only a matter of time before it gets released.