Nintendo has always released low end commodity hardware.
Which does not mean that the Ouya cannot be good. (Basic microeconomics has a lot more to say on that topic.) But breathless cheering about this project "shattering the mold" doesn't really reflect reality.
It is a problematic situation for Ouya, because they have no compelling reason to stay on the platform once you sniff the slightest success.
The only place it might have an advantage will be for games that allow third party modding. Games with a side market for community DLC could be an interesting idea.
If you are an indie dev who releases a game for the Ouya and gets some respectable sales you are quickly going to do the math on how many more sales you would get from a Xbox/PS version. As a result consumers are more likely to think "Oh, an Ouya game. I'll just wait 3 months for it to show up on Xbox".
In the rare, doubt-it'll-happen case of a hit game coming out first on Ouya, I would bet we'd see it on Steam, for cheaper, within six months--because porting will, by necessity, be That Easy.
Ouya could, depending on tech stack get a port in that situation (and I've considered it for my own project because I'll already have a gamepad API for the Windows/Mac release), but it will never be a leading platform that people actively target because the market share is infinitesmal. There are too many better options in front of it.
EDIT: Also, bear in mind that Ouya isn't doing anything groundbreaking with their gamepad stuff - the gamepad APIs already exist in Android 4.x. The only Ouya-specific stuff I have seen is in their purchasing layer.
But it is purely a numbers game: if you've got a chance at 0.05% of Steam consumers you've blown away the 25% or even 50% of Ouya owners who might be interested in your game and it's not even close. And that means that nobody's going to write exclusives for Ouya and so the value prop for buying one, outside of a small perfectly-targeted segment that doesn't have a console and wants to play games in the living room and doesn't care about established franchises and is really really cheap, dies on the vine.
For the Ouya to "smoke" other consoles in sales, it will have to offer something unique, and that looks like a really tall order at this point.
The N64 particularly was pushing the envelope for consumer hardware at release and both the NES and SNES were quite advanced for their time (though their USA releases lagged quite a bit behind the Japanese/Famicom releases, which means at the time of US release they weren't quite as impressive).
They certainly stopped focusing on advanced hardware (in the raw CPU-power sense) post-N64 though.
N64 was a bit more modern, you're correct, because they went with the SGI/MIPS, but I was distracted from Mario 64 by GLQuake 16 player LAN deathmatches, so..
It wasn't until Commander Keen (circa 1990) that PC systems were capable of doing these sorts of games justice (and then just barely) and the videocard you used in such a system would cost significantly more than an entire NES/SNES console.
Of course there are other systems like the Amiga (my first two systems were a C64 and then later an Amiga 500) and the Atari ST that did have more game-friendly hardware but they were also nowhere close in terms of price range to the consoles and while more game-friendly than PCs still never quite achieved the pure tilemap-scrolling bliss of the dedicated consoles.
Of course, after the explosion of 3D graphics with the Rendition and the original Voodoo, PCs took off in terms of raw gaming power and have left console systems in the dust since, but it wasn't always that way.
But this is besides the point, ask anyone what sells nintendo consoles, its not the consoles. Its the amazing 1st party games.