They might be immensely more profitable and they would be good to remake mobile games a little more fun. Super Smash Brothers would sell alot and with very smart in-apps or f2p like Halfbrick style would probably dwarf Angry Birds, many of Nintendo titles would. They are just not reaching tons of fans and sales.
Nintendo sells 4M units because that is a small set of good games on a small market like console 10-20million users (across all three bigs it is only 150 million). Mobile is billions of users, pretty much everyone would buy Nintendo games on mobile, they could also change premium pricing and sell easily at 5-10-15 even 20 maybe. In-apps would keep them alive in profitability and they could change mobile gaming in big ways even down to controller accessories.
But would they be more profitable? Pokemon X/Y's market price in retail ~$35 right now. Pokemon X/Y sold 4M units over the course of their first weekend [1]. And that's not counting console sales related to X/Y.
I imagine 2DS holiday sales are going be pretty healthy because of Pokemon X/Y by parents who bought into the FUD about the 3D in the 3DSes turning their kids' brains into mush.
My niece, who has access to both Android and iOS tablets is getting a 3DS just for Animal Crossing. If the software is compelling -- and one can make the argument that it is -- people will continue to support Nintendo.
1: http://www.polygon.com/2013/10/15/4840738/pokemon-x-y-sales