Might as well nail my mast to the post:
Just as the XBOX and PS3 demand to hog your living room TV (particularly if you're using Kinect - you need some decent space to use that, so it's not so bedroom friendly), Nintendo realise that sometimes you still want to play games when other people are taking turns watching normal stuff on the TV. So from that point of view, a console that doesn't stop working when the main display is otherwise used is genius.
Power doesn't matter so much - good if it steps over the current gen, but otherwise, no-one has won the console wars on raw speed in the last decade or more.
If all the manufacturers continue their current strategies, Nintendo will release it at a price where they make money, MS and Sony will pull out all the stops for their next gen machines, and end up with expensive consoles that loose money as they sell. Being underpowered never hurt the Wii, and if the U can run things like Crysis, serious gamers should at least be happy with it. If they absolutely must have the biggest GPU, they can spend on the other consoles, but they are in the minority.
As for the 'expensive controller' - well, it's a relatively dumb touch screen, so not necessarily an expensive part over the already moderately sophisticated Wiimote. As the machine works with Wii controllers, it's not a problem if you use those instead. The big question is - will the base machine come with a touch screen controller, or will it have a Wiimote? Ie. will the touch screen be an optional extra (or more expensive bundle), or will it be sold with every U?