When you feel so guilty about past success, you purposely try to sabotage yourself so your rivals have a chance.
Wii was a one-hit wonder with enticing motion controls, everyone has that now. A generation behind in its time, you knew the PS4 was over 5 years away. But PS4 is just a year or two past Wii U, everyone will wait instead. Casuals will stick to their original Wii and ipads/pods.
The most important fact is that it takes time to get to know the hardware of a game system well, for the developer API's to get to that point where they can make great looking games. Wii U is only 50% stronger than a PS3, but modern PS3 games look over 50% better than 1st gen PS3 games, so the result is when Wii U is released, its games just aren't going to look much better than PS3 games. Nintendo could have used this opportunity to be the first to market a serious next-gen contender and re-dominated this gen like they did the last one with Wii, but intense feelings of guilt of how much insane money they made with DS and Wii's success has caused them to want to destroy themselves with Wii U and the overpriced 3DS. When Microsoft and Sony release their next-gen systems that are going to have better frame rates, handle 1080p 3d games, better texture resolution, anisotropic filtering, physics, other nice graphics effects, Nintendo's corporate harakiri will be complete.
USA felt so guilty about success against the Japanese in WW2 that we made a Wii U to the Iraqis and Afghanistanis and let them kill thousands of our soldiers.