By the standards that say the Wii U isn't retro, the NES wasn't retro in the days of the PS1 or PS2. I think it's from people getting old and not wanting to admit to themselves that they were already adults when something that is now retro was released. I don't care what some "scene" defines as retro - if your definition of retro has a hard cutoff at some arbitrary point that doesn't move with the times, it's a bad definition. Just to make a point: Episode 1 of 8-Bit Theater is older now than FF1 was when 8-Bit Theater was new, and not by a slim margin either. Does that mean that Final Fantasy 1 isn't retro? Psh, of course it is. It's retro because it's old, not because it uses sprite graphics.
So yes, the Wii U is retro. Nintendo Land is a retro game. Super Mario 3D World is a retro game. People say that modern graphics aren't advancing as fast as they used to, when that's the opposite of the truth. Graphics hardware is advancing at absolute lightning speeds compared to what it used to, but the reason that the visual component of games isn't improving as noticeably is multi-layered. The first layer is simple - resolution. Old games ran at 240/288p or 480/576i, or various small resolutions such as 320x200 for PC and home computer games, whereas modern systems keep cranking that dial up. 720p, 1080p, 1440p, 4K, 8K, all natively. Increases in hardware power go there first, while they used to go to making more stuff display at the same tiny 240p resolution, and at times could even chase the beam rather than using a framebuffer.
The second layer is almost as simple: modern graphical improvements seem more incremental than the jump from Master System to Mega Drive did. While the hardware leaps are increasing, the changes to art styles are incremental - better lighting, more polygons for facial animations, better hair physics and more realistic jiggle bones are all well and good, but what do they do for your art style? Not all that much, especially if you want to do a cartoon aesthetic. The realistic hair physics power could be repurposed into dynamic squash-and-stretch, but other than that, most of what you want to do was likely possible on the 360.
The third is, to be blunt, political. You aren't allowed to have certain appealing art styles in Current Year. When indie developers face mob harassment from "journalists" for daring to have a marriage mechanic in the game without diluting its meaning (the entire purpose of it was to give you heirs, and they still couldn't help themselves), you can bet that a AAA studio wouldn't dare facially scan a woman to put into their game without hiring an art team to give her a few good whacks with the ugly stick to keep with the Trans Gaze guidelines. Doubly so if her breasts are of a sufficient size that a man who identified as a woman would only be able to attain a similar girth with implants. It doesn't matter how much hardware power you have, if your art style is forbidden from having realistic or aesthetically pleasing characters, no number of polygons will make Generic Brown Manjaw Girlboss number twelve million stick out in any way.
But don't let any of that muddy you from the fact that, yes, these old consoles are in fact retro. We were calling the Master System retro back when the PS1 was out.
To me it's not retro - we now have the full arcade experience at home (Christ, there's an ibara port on PS2 - would you call any Cave SH3-based game retro???), and a few GOOD console games kept getting released even after the launch of the ps3 (And I know that here in Europe the ps3 launched a bit late, but c'mon... 2007 JRPGs have no business being called retro)
