The developers thought that the 40 MB size limitation for Wiiware games was too strict. Since they are not in the position to change Nintendo's policy internally, they decided to apply external pressure to the situation by making a great game that does not it within the (arbitrary) limitations. I'm not sure Team Meat expected Nintendo to necessarily give them an exclusive exception, rather that they would change the policy for ALL developers. If enough companies wish to release high profile downloadable games on the Wii that are over 40 MB, it's reasonable to expect Nintendo to change their policy because they stand to profit so much from changing the rules.
Nintendo gave no indication that we know of that they intended to change anything. So Team Meat made a decision to develop a game they had no indication would ever have any chance of coming out.
Have you ever heard the saying "hope for the best, plan for the worst"? The reasonable course of action would have been to develop the game strictly for the size limit, but develop in such a way that they could add more content given time and a change in policy. At the very least they should have been developing the game for a larger size limit, but leaving themselves ways to cut it down if the limit didn't change. But they developed the entire thing based on the hard requirement that Nintendo changed the rules, and then had to scramble to totally re-design the game at the last minute. I don't see how any half-competent business could put themselves in such a position, at least not ones outside of a field like law where changes are inevitable.
Could you imagine someone writing a flash program targeted at the iphone, despite the repeated assertions by Apple that it will not support flash? Does that seem like a reasonable business decision? Would it be reasonable for them to play the victim card when Apple didn't change their policy by the time the software was finished? I think the decision by Apple to not support Flash is as bone-headed as Nintendo's limit (assuming the limit is indeed arbitrary and easily fixed), but that is not excuse for developer making a program that they had no reason to think would ever actually work.
What about someone developing a program aimed at windows running on ARM processors? It seems inevitable that Windows will eventually be ported to ARM, but that doesn't change the fact that a software developer who wrote such a program has no right to complain that it isn't out yet, since Microsft hadn't announced it was even going to happen, not to mention when.
Even if Nintendo's decision is arbitrary, even if it is stupid, even if it should be changed, it is still theirs to make, and it is not an excuse to ignore it.
I also think that Team Meat must have spoken to someone at Nintendo who at least implied that the limitation could be changed at some point in development (probably early on). That's just a hunch though.
I strongly suspect that if Nintendo had done so Team Meat would have used that as a defense for their actions already. The fact that they have made no mention of such a discussion despite all the flak they are getting for this indicates to me that no such conversation took place.