There are numerous factors, not just one or two, that's led the Wii U to where it is now. I won't be able to name them all, surely there's gonna be some things I have missed, but I'll try to get as many of them out there.
1) Successor to the Wii
The Wii was a massive hit, and showed Nintendo is definitely capable of reaching out to every audience. It became an anyone can play this game type of device. But this is just one part of the poor sales. Nintendo went into the Wii U with the same mindset as the Wii, hoping to capitalise on the casual market they established in the previous gen. They decided to keep backwards compatibility as well, which is both a blessing and a curse. This isn't about the games, but the peripherals. If a person sees Wii U advertisements with one gamepad and four wii motes, of course the misconceptions of what is and isn't are going to arise.
More on the gaming side of things, they were able to create unique experiences using a motion control interface. However the system was so underpowered that unless you invested a helluva lot of time into getting the best out of it you weren't going to. Most of the big hit sellers missed out on the Wii because it was going to push teams well out of the time limit of what they were given (opinion). There's also the terrible net connectivity (except Goldeneye 007 and I don't know how they did that).
What has that got to do with the Wii U? Mentality. The successor of the Wii isn't something to masturbate over. At launch, you still had tons of people content with their PS3's and XBOX 360's. Even with research, you'd find that a lot of what was being lined up for launch wasn't anything too special. I suppose the same could be said for PS4 though, however it's coming off, from a gamer's concept of quality core titles point of view, an amazing PS3 career. (Not just shoot em ups guys, I mean the large number of action, adventure, fighting, racing and rpgs of all types as well).
Point is, the majority of people have already developed at the last gen that Nintendo can't cover nearly as many bases as the other two were able to. The only thing that Wii excelled at well above the rest was quality couch experiences. The Wii U's announcement was never going to be the sudden dismissal of that mentality. The Wii might have sold a ton, but how many of those are currently dust covered cabinet hoggers? Mine isn't, but it's not in a cabinet. Still dust covered.
2) Third Party Support
For many, this is a major point. The Wii U for many is mainly bought for the First Party games, but it technically should be powerful enough to run a lot of the other games it is missing out on. So why? Here's a prime opportunity for a console that can be everything has wanted for a long time. So why? Is it Technicality, where the developers are having issues? Hate, because Nintendo isn't the greatest to conduct business with? A lack of understanding of the console, because that would certainly explain a few problems like missing DLC and games.
But while I could speculate for hours on end, it doesn't change the fact that the Wii U has already proven it can't handle Third Party support. You don't see the Wii U logo lined up with multiplats all the time, and people take notice. No one wants to buy half the game on the Wii U when they can get the full game on any other system. You could buy two consoles, and buy games on both, but when you're not so much in the money it's not really that feasible of an option, is it? I've already seen plenty of people on this forum and others where they are more than happy to have them all, but they don't have the moolah to do it.
3) Marketing
Okay, for me, this is the assassin of the whole Wii U Campaign. You make a product, you need to sell it to make money. I'm with R00bot on this one. Living in Australia, there are next to no ads for the Wii U outside retailers. I've seen PS4 and XBOX ONE plastered all over the TV and bus panels, but mate, for the whole year head start the Wii U had, nothing. Absolute zip. The Wii U has effectively been reduced to one section of EB Games, JB Hi Fi and Target, while the Playstation and XBOX sections are about three times as large. Oh yeah, the Wii sections seemed to have merged with the Wii U section as well.
I can't even comment on ad quality because there are none. None that sell anyway. 15 second segments aren't that great of a sell. They just get drowned heavily between those ads that show the effects of smoking, and the ads that show the effects of drink driving. Which do you think people will pay attention to the most? Sure as hell ain't 10 seconds of Super Mario 3D World.
And after all that, Iwata has the balls to say "I'm happy". I'm confused to what this means, since last time he ended paying out of his own pocket. I'm guessing it's the other meaning.
4) The Software
The software they've made has been great. Unfortunately, the kind of software they make tends to target the same audience over and over. They hardly deviate from the kid/manchildren catering style in their games, and when that's all you're offering on the system so far, of course any other audience is alienated. If they had that third party support up front and in total they wouldn't have this problem. But they do and the only way they are gonna fix it is if they make games that cater otherwise, or get their third party support game back up. While I don't think they'll honestly do either, even if they did manage one, the other or both, that still doesn't mean people are gonna flock to the Wii U.
5) The Competition
They've stated before they care less for what the competition is doing. They should. It's competition. If it wasn't then we wouldn't be discussing this because it would be a monopoly. The hardware comparisons are in, the third party support levels are in, the future is clearly written. Saying things like "we don't care" is like saying "even if our competition is doing better, we won't change to be better than them". People have never wanted to hear this kind of crap ever.
But more on the competition, do you know what Playstation used as a slogan? "This is for the players" And what direction did XBOX take? "Welcome to the Next Generation". If I was a consumer looking to buy anything, I would seriously consider whoever is the edgiest. The Wii U had something like "There's we, and you". That's a fairly weak grab at any potential audience compared to the other two.
---
I'm gonna conclude answering the OP's question. People are content with paying for more if they think they are getting more. The Wii U didn't deliver at launch, and with a whole year to fix that ahead of the competition, still haven't. People are still confused, people are still waiting for a compelling game to their tastes, people still wants to see an ad that says "Oh look, I actually want it now".
As for Nintendo changing things up, it's within their potential. But it's gonna take a little more than a price drop to go ahead and do that. People aren't gonna fall for the cheapest dust angel again.
