I do accept that it was built around priorities I don't share. I just don't agree with those priorities and am arguing my reasons why I believe those priorities are wrong, and why TEV is no good for next-gen hardware.
There is not a single direction Nintendo could go (apart from backwards compatibility up the wazoo) where an existing solution isn't better suited than TEV. There are mobile GPUs if they want the smallest, most power efficient device. There are off the shelf options. There are monster processors and versatile CPU/GPU hybrids and scalable solutions aplenty.
I'll meet you and admit that the Wii, although I like the design ethos, is a bit less than I would prefer from a GPU standpoint. I just don't think it matters a whole lot in the greater scheme of things.
I don't agree that the alternatives open to Nintendo at the time of decision making was all that appealing given the design constraints they wanted to work within. At this point in time however, there are more options, and Nintendo is perhaps the most interesting company to try to predict because they really have a multitude of paths open to them. If you want to have any chance of being correct when making predictions, it makes sense to see what they have prioritized before and how they reason.
* Their policy is to make game devices, not multimedial media hubs, or computing platforms, they have no other line of business they desire to tie into or strengthen or market to manipulate. That is not to say additional functionality won't be there, just that the purpose is strengthen the overall appeal and position of the games console, not to tow any other line.
* Nintendo prioritizes usability. Battery life, size, ruggedness and so on are considered important. They put a handle on the GameCube!
* They seem to have a preference for in house or custom designed electronics. Don't know why really.
* They don't care about specs for their own sake.
* They don't design hardware that is immature, but will work well two lithographic generations down the line. Their devices are, in that sense, mature from the get go.
* They like novelty, Virtual boy, Dual Screen, Wiimote - they like to bring something new to the table.
IMHO, when speculating, the more of these properties that fit the prediction the more credibility it has. (For the record, I believe they will upgrade the graphical capabilities for their next generation offering, but I emphatically don't believe that it will be the focus of a new device.)