It would be streaming the game from the 3DS, so you'd still need a 3DS to play them.
No, the idea would be that the 3DS Player would be an attachment for the Wii U that you would insert your 3DS game card into, just like the Super Game Boy and Game Boy Player peripherals for SNES and GameCube, respectively. No streaming required.
Why not? Why does Microsoft keep putting out new 360s? Cuz people still buy them. I was at Walmart lookin at the Wii U games and a lady was planning on buying a Wii for her nephew. Just because it's old doesn't mean nobody will buy it, as long as its on the shelf people will buy it. They might just be waiting until it reaches their price range.
You're right, some people will still buy a 3DS, but most of the market will be gone. Unless of course there is a price drop, which isn't out of the question. A $129 3DS is a very enticing proposition.
I actually wrote about all of this in an article almost a year ago, where I theorized that perhaps the door in the Wii U would have a 3DS slot built-in. Take a look:
http://www.eggplante.com/2012/02/06/wii-u-3ds/