Meh. They've been trying to do this (Monster Hunter 3, anybody?), but it's not going to be sucessful this generation. Handhelds need a huge increase in power before you could look at a portable gaming system and a console playing the same game and think that the handheld comes close to comparing.
Sony tried option B with a hybrid smartphone/PS Vita-like device. Didn't work out so well. But I'll agree need to branch out their 1st party titles into the mobile smartphone market.
Personally, I feel no need to buy a mobile gaming device anymore with the widespread use of tablets and smartphones. Nor do I want a mobile-like device to play games at home... part of the reason why I have almost zero interest in the Wii U.
BUT, if Nintendo wants to make it seamless for developers between a mobile device and a console, then more power to them. I could tremendously cut down development costs.
While mobile gaming might be affecting handheld -gaming device sales, there is really no comparing the experience. Touch screen controls just generally suck for gaming, as evidenced by most of the successful games on mobile platforms which are better defined as "time wasters" than gaming experiences.