Iwata is saying the opposite, wide audience titles don't have the same appeal anymore, casual gamers are moving on and aren't as reliable as the core market.
He feels that the Wii failed and is guilty for the separation of the market, he further explains how gamers on their platforms while having a Wii also has another gaming system along with it for better hardware and online. Things they're trying to get right with the Wii U against other future consoles, along with more developers.
The Gamecube was by no means a failure though it pales in comparison to the massive sales the PS2 got.
The PS2 was one of the early systems of it's generation, it doubled as a DVD player (very important at this time), it had backwards compatibility, it was cheap, it had casual titles like the eyetoy and further down the line it was very easy to pirate games for.
Good sales from the beginning lead to developers jumping aboard, more developers lead to a great software library which ultimately lead to even more sales.
The Gamecube just played games, mostly first party ones because of the success the PS2 had with developers.
With the Wii U however, they're planning to have some of the success the Wii had by making titles like 2D Mario and Wii fit all this while making games that generally doesn't get that many good sales like Pikmin.
Pikmin is too tough of a game for the mainstream market, it's an RTS game, Mario on the other hand is a simple 2D platformer, a genre clicking well with casuals because of it's simplicity, while Nintendo could make it the hardest game in the series it would still be simple to control plus they also have the super guide thing.
Iwata's main goal according to him is to change the Wii brand among core gamers and still have some accessible games available but to a lower degree.
They spent an entire generation ignoring some of the franchises that made the Gamecube memorable, other times they simplified some games like Smash Bros and Mario kart making them have a wider appeal than before by adding tripping and whatnot.
Nintendo wants to move away from that, it's one of the reasons why Miyamoto at the Pikmin presentation said that Pikmin 3 was a deep experience with even more strategy elements than before.
Casuals are moving on to other things like smartphone games and the amount of core gamers is bigger than before.
Reliable core gamers are a better financial source than casuals this time around, well according to Nintendo at least, they have the data and I see no point in lying about it.
Anyway if the Wii U gets great sales from the beginning and more developers aboard because of that, I don't see how it could end up being a failure. I'm talking both financially and how the Wii failed in some aspects.