Ah, Red Steel...
See, this is the other part of the problem. Red Steel was heavily hyped as an integral part of Ubi's big push on the Wii, and a whole lot of people were hyped up for it. It sold well, in the way that games do at launch, but then people played it.
It's suddenly not hard to see how people are hesitant to look at 3rd party games, at least beyond niche titles like Trauma Center: Second Opinion. Remember what I said earlier about bad 3rd party titles? In this regard, 3rd parties sabotage themselves. Whether by freak accident or by shoddy design, the 3rd party games we get most excited about on Nintendo platforms tend to be the crappiest (example: Final Fantasy Crystal Chronicles on the Cube), and as a result, the market is ruined for everyone else.
Yeah, I'm going to go out on a limb and say that I doubt a Red Steel 2 would sell a whole hell of a lot. Though forgive me if I was under the impression that Rayman was blowing that away as well, since that's the only franchise Ubi seems interested in continuing on the Wii.