Factor 5 has a good point. All you have to do is play Prime 3 to realize that the Wii's graphics hardware is not the fifty year old piece of junk its detractors claim it to be. I think people have the false perception that GC was the weakest console last generation, and that Wii is simply a souped-up GC, which means it falls miles behind the other two consoles in terms of performance. In fact, people say Wii's hardware is 2 or 3 times more powerful than GC. How much better could the 360 or PS3 possibly be over their last-gen counterparts? And more importantly, how much of that power are devvers exploiting right now? There is a performance gap, but it's not exactly a yawning performance chasm that's dooming the Wii to craptacular graphics even with the best artists and programmers.
Ultimately, I would probably have paid $450 for a powerful-hardware Wii with the exact same upcoming games lineup, only with prettier graphics. But that would mean giving up the current Wii's level of market penetration, third-party support, and a strategic foothold going into the next generation. And to be honest, if the 8th-generation Nintendo console really is coming out in 5 years, there won't be nearly enough time for Wii's graphical shortcomings to become glaringly apparent- it generally takes developers at least a year or two to start really utilizing the hardware to maximum capability. A lot of Wii developers don't have that problem (as the general architecture is the same as GC), which means Nintendo has bought them even more breathing room. Sony, if anyone, is screwed. They poured a heck of a lot of money into R&D making the 'same old' even better than before, hoping they'd be able to squeeze 10 years of console lifetime out of their investment- a pipe dream even in the best of circumstances. They have little to show this generation, and when Nintendo (and MS) demonstrate their newest innovations, they'll have even less to show.
So, ultimately, the $250-in-hardware Wii was a good business decision- not a graphical deal-breaker. Can't wait to see what comes next.