I don't think Nintendo should go 3rd party yet. Even if the Wii U fails and burns in ashes they can still probably give it two if not one more attempt at a new console before they are desperate enough to do that. Nintendo is too proud and to be honest I would rather have 3 major gaming competitors rather than two. It creates more diversity in the gaming sales competition universe.
What do you mean power? As in Graphic power? I don't think that's possible with an update. At least not a significant change. Besides I think Nintendo made the Wii U to run all their games perfectly and beautifully and that's the concept they stick with lol.