I was thinking the same thing. I'm too would be very cautious about this. Beyond just the tiny screen for that one thing and the dinky controllers, them wanting to use the Wii-U tablet/controller thing like a portable gaming device leaves me dubious, at the least. Lemme put forward a thought: So with the people that carry not just their phones but laptop/tablets with them already, what would be the incentive in carrying an extra device with them, of relative similar size to their other devices, but carries a limited function and that's to play exclusive Nintendo games? And that's not considering the extra accessories that may or may not be needed to use the thing, on top of what needs to be carried with the other devices people already carry to use them.
I respect what Nintendo is trying to do and has been trying to do for the past 10 years or so: make gaming fun and easily accessible for everyone and not just a select, niche group. For most part, it's worked out fairly well for them; the Wii was a smash hit and ushered this trend of motion-control functions, which is at the heart of the current VR push, that everyone and their mother seems to be trying sell as the next "innovative" thing. I can't say if this thing is the step-forward the company needs or if it will be a success, that all remains to be seen, but the thought of all this tech, just to play exclusive games, leaves me a bit cautious.