They forgot the reason for the Nexus' success.
You were not paying a brand tax.
The Nexus line was the purest Android experience you could get. No naff overlay, regular updates and a phone at a reasonable price. Profit margins were tight and as a result it suffered in other areas (little marketing, less support etc) but the concept was a good one.
Very little third party support as well (Otterbox refused to build a case for it, for example).
They need to return to what they were good at.