Even though Nintendo owns them and will make sequals, Rare is the one who made the game awsome. Time will tell if Nintendo can replicate that greatness
You've got it backwards - Rare had to replicate Nintendo's greatness. There's scarcely ever been any question about EAD's ability to put together a solid sidescrolling platform game with likable characters.
Nintendo still lost them, they didn't discard them. There's a difference.
Nintendo sold their stake to an eager buyer. The difference between that and "discarding" Rare (i.e. seeking a seller) is that Nintendo got a crapload more money than they likely would have gotten if they had shopped it around for buyers. Nintendo made a business decision, and history has shown that Nintendo is very good at business decisions, even when such decisons baffle their customers and run counter to popular industry convention.
They still have the capability and talent to produce good titles, and may well do that in the future - for Microsoft. So I wouldn't rip into them just because they aren't Nintendo's now.
Yeah, a lot of people get caught up in the console wars for no good reason. It gets ugly.