Ultimately, what they're doing is smart. They had to maintain two completely different platforms and game libraries up until now. From the release of this thing, it'll be only one.
That sounds like a very decent business decision to me. Especially considering how the profitability of either separate arm has shrunk. Android/iOS has cut into the profits from portables and well, the WiiU hasn't exactly been a glowing a success either.
As for nintendo being in trouble overall. Far from it. They have a ludicrous amount of money stashed up. They can afford to fail a few generations without being at risk.