I think it was the best idea game-wise they could make. I also think that they shouldn't pack it out, either, though. Everyone with a Wii probably wants it, and they should wait to take it out until Wii demand goes down. Once it does, they can pack it out, sell it for a reduced price, and sell the Wii separately. They need to wait though, economically, because there is no reason to reduce the price of an item that is selling out. Once demand goes down, they can use different pricing options they probably have already planned out, but if it isn't broken, what is there to fix?
Edit: Also, I just realized that at some point, Nintendo started making an increasing profit on Wii's, mostly because they've definitely made enough to negate the price of development for Wii Sports. Now, rather than ten or so dollars being profit from the $50 mark-up Wii Sports probably provided, they make all fifty bucks from it, so there is definitely tons of room for a price drop. Knowing this, as long as Nintendo is able to compute a strategic price point that allows the system to not look "cheap" for consumers, but instead, seem like a great value, I see no way that Nintendo could lose this generation to any competitor.