It's a shame that the Wii U is a flop, but, in all honesty, it's really just a continuation of everything that Nintendo's been doing for the past THIRTY YEARS or so.
The company is absolutely hardwired into the mindset of "We Shall Do What We Do And Damn The World Around Us", unable to shift and change in a fluid and rapid manner. When they DO appear to be adjusting to shifting tides, they do it in such a Nintendian way that it leaves people scratching their heads in confusion.
When the world began to adjust to standardized optical media -and it was plainly obvious that the CD was the way things were going- Nintendo made a cartridge based system, and then a puzzling proprietary magneto-optical... thing... and promptly lost massive amounts of third party support.
When the DVD became the heir-apparent format, Nintendo had the option of "one upping" Sony's PS2... but instead chose that weird minidisc format, again isolating it from the third parties who LIKED having more than 1GB of storage space- and eliminating Nintendo's console as one that people just might choose as a DVD player (one reason many people believe the PS2 took off so quickly was that dual functionality).
And onward and upward- Nintendo does what it does, seemingly in a vacuous bubble away from the influence of the people that actually buy its products.
Starting with the GC, they've basically used modified DVDs(or in the case of the Wii U, Blu-Rays) as their formats. The GC used Mini-DVD with a different copy protection scheme(Incidentally, it holds about 1.5 gigs), the Wii uses single and dual layer DVDs with a different copy protection scheme, and the Wii U uses Blu-Rays with a different copy protection scheme.
The Wii's copy protection mechanics of course utterly failed, as it's one of the most easy to pirate games on consoles in history. Only the PSP is easier.