It's not about cutting edge next gen graphics. It's about gaming wherever and whenever. Use it as a console, a handheld or a cool stand alone/table top game system. Nintendo has never been about competing with Xbox/PS consoles on gfx quality and high end specs with realistic games. Nintendo has always been more about fun to play, cartoonish games and often for the younger market. Really though, you need to compare it to tablet and/or handheld gaming systems and treat console mode as an extra feature.
It's a cool gaming system, but from what I hear it has some serious flaws. Putting it in and out of the console base apparently scratches up the screen. Problems with games locking up or gfx glitches. Apparently if you slide the controllers into the charger/strap things if you get them backwards they lock on and don't simply slide back off. When the controllers are attached to the tablet part they can be a bit wobbly.