It needed to be done, I was pretty baffled by their inclusion of two versions at release. The Deluxe now is retailing at what the PS4 is retailing at, big problems there.
It's no lie that the Wii U is doing bad, more recently they have encountered "dire" sales with its predecessor, the Nintendo Wii, easily outselling it. The PS4 on a level pricing with the Wii U would be just awful for Nintendo. While power isn't everything, it counts, it's no lie that the PS4 has a competitive advantage over the Wii U in terms of power and features and while it may be about the games, recent trends show just how much technological power means in this rapidly advancing market.
It's not even power, it's games, the Wii U has been out for a while now and it hasn't produced that many stand out games - I would actually say that none are console sellers. While E3 offered us some more, it simply wasn't enough in my opinion in terms of quantity and quality. Sony's conference showed a stellar library which looked very intriguing and there were established series as well as great and established developers, not to mention it's third party support.
The Nintendo Wii was marketed perfectly, it was easily the cheapest option (market penetration), it had a big advantage in terms of innovation - true motion gaming was a revelation at that time - while the GamePad is a great piece of technology, I just don't feel it is on par with how revolutionary the Wii was. There's also the fact that the Wii targeted a large market being the casual family market allowing for big sales maximisation. The Wii U is hard to pin point, they seem to be casual still but yet they wanted this 3rd party support bringing in the, so called, "hardcore gamer" well sales already show**this; that typical gamer is better off going with the opposing consoles. With this in mind, I feel the Wii U is sitting in limbo trying to please to much, it's a well known thing in business that one should focus on one particular aspect for success - shown by a few theories.
So i would feel that the Wii U at the moment is destined to fail, the only thing it can do is to lower the price and appeal to that consumer. The market is falling, people have lower incomes, it would be a perfect opportunity, I don't think $50 is enough, they need a bigger advantage.