Well, I think we can all agree that any format Nintendo uses will probably be adequate for the job. Even if they continue using their modified DVD format, that would be enough to get the job done. Is 9gb of storage per disc ideal? Perhaps not, but if spreading a game over multiple discs must be done with some titles then it can be done and it won't be the end of the world.
The thing I'm more concerned about is the price of the games. Is Nintendo going to continue their policy of keeping the MSRP of their games at the traditional $49.99? As it stands they are the only console manufacturer that still does that, with Sony and Microsoft bumping their MSRP up to $59.99. DVDs are cheaper to manufacture than Blu-ray is, so if the cost of switching to Blu-ray means higher costs passed on to consumers then I'd rather they continue to stick with DVD, even if it means the occasional multi-disc title.
And of course, it doesn't have to do with just the media itself either. There's the additional cost of the drives that would have to be installed in the console. One of the reasons (not the only reason mind you, but certainly one of the main reasons) why the PS3 had to cost $600 at launch was because of the inclusion of Blu-ray drives. Sure, the cost of integrating those drives went down over time, but even to this day it has to cost a good chunk more to manufacture a Blu-ray drive than it does to manufacture a DVD drive, especially with the different and more expensive lasers involved.
Everyone so far seems to be arguing about the storage capacities. I just thought I'd put out there that there is also the issue of increased cost, and is that something we are willing to accept for the sake of greater storage? Look, DVDs can have as much storage as you want, its just that you might have to spread it over multiple discs to do it. But with DVDs being only a few cents to produce that's not a problem, right? You can probably produce like 10 DVDs for the cost of just 1 Blu-ray disc.