I was actually up late last night browsing Wii U stories via Google News. I've been a bit behind on all this.
It cracks me up reading all the doom-and-gloom predictions regarding Wii U. Everyone seems to ignore the fact that Wii essentially won this generation. Soccer moms aside, I'm obviously talking about raw market penetration and sales. Nintendo did it all with low end graphics and avoiding any financial loss on the hardware.
The new rumors are that Wii U either barely passes or barely falls short of current generation machines. Frankly, as far as I am concerned, if the Wii U can handle 1080p at 30 FPS (though 60 FPS would be hot), I'm sold. My current Wii is giving up the ghost slowly. I've put a lot of abuse onto it. The video cable now has that age-old problem of requiring diagonal pressure to keep the colors all correct. I look forward to plugging in an HDMI cable and eliminating that problem entirely.
Do graphics matter? Yes and no. There is certainly a quota you have to meet. Nintendo chose wisely to stick to standard definition for the Wii because HDTV penetration was pathetic back in 2006. Now, HDTV is common. (Heck, I didn't even see any standard def TVs during my last trip to Best Buy.) It's something that has to be addressed, and Nintendo is taking care of it. Still, it's funny to see critics mock the Wii U for "catching up". Last I checked, the Wii was already winning... by a very large margin. Also, so many developers have expressed the difficulty in working with such high end hardware. The PS3 has a lot of life left in it. It will be a while until developers require more power. If the Wii U were to match that, it would be fine for many years.
(There will always be the crazy obsessive groups at Crytek and the like who push the envelope, but it boggles my mind that they don't just make high end PC games instead of waste so much energy downgrading to consoles, which have no power to speak of.)
It's the same cycle over and over. Nintendo knows better than to jump to the front of the hardware spec arms race. GameCube was way more powerful than PS2. Look how that turned out! It's about playing games. It's not about seeing 1000-polygon nose hairs on the protagonist. Sure, higher resolutions are pleasing to the eye. I'm a fan of good graphics, but if I want to bleeding edge realism, I'll hop on my PC.