I actually talked to my friend who previous to the release of Gears of War and the general downfall of Epic, was a huge Epic fanboy.
What he was telling me is that Unreal Engine 3 was designed from the ground up in several different sections to run on each of the systems it's currently on (360, PS3, iPhone). What he was saying is that since the engine is designed so specifically for each platform, that in order to port it to a completely new system, they would likely have to develop it again from the ground up for the new system.
It seems to make a reasonable amount of sense to me, and in the end still results in more or less the same thing, which is Mark Rein crapping on Nintendo again and not wanting to spend the resources getting it done.
EDIT: Oh yeah, he also mentioned how they're probably pooling most of their resources into finishing Unreal Engine 4. Makes me wonder if they'll put it on Nintendo's new system. I get the feeling the answer would be no, regardless of how powerful it is.