If Nintendo thought like you, I'm sure they would be third party by now.
I'm not saying Nintendo shouldn't care, but if you look at the facts (sales data), you will see that it's the Playstation and XBOX brand which have the highest mountain to climb.
And another thing, if Nintendo releases Wii Zelda this year, along with Mario Galaxy and Metriod Other M. I think this will be one of Wii's best years, to date.
Almost everyone believed Nintendo was doomed, when Sony announced the PSP.
Almost everyone believed the Wii wouldn't be market leader.
And now, funnily enough, some people believe Nintendo is in trouble because the competion is coming out with its own version of motion control games?
What I'm trying to say is, just because the competition is doing something similar to Nintendo, does not automatically mean Nintendo is doomed.