A reprint of an article that first appeared on our friend E. Zachary Knight's Divine Knight Gaming over at Gamasutra lays out a pretty good argument as to why Nintendo is wrong with what it is trying to do with YouTubers creating let's play videos of Wii U and 3DS games.
The short answer on why game developers and publishers like Nintendo are wrong (and is a conclusion rooted in common sense and law): fair use. And even though personalities like PewDiePie may make millions of these videos, that doesn't give the Nintendos of the world the right to monetize these videos. Here's an important excerpt from the article:
"When it comes to money, one of the tests over whether fair use is in play is the impact that use has on the market of the original. So if, as I posted above, that impact is beneficial, then fair use is a go. That means if I am not directly taking business away from you, there is no harm being done.
So in that case, monetization is allowed. If they are acting as an advertiser and driving customers my way, they deserve to be paid for that work. We are getting paid via the increase in business, they are getting paid via YouTube advertising. It is a win win."
It's also important to note that EZK, who develops games on the side, makes a very important distinction about "giving" Let's Play video makers permission to make a video: you can't give or take away a permission you do not have control over because it is simply a case of "fair use." He compares giving such permissions to giving a person permission to "breath" or "eat."