AFAIK the rule of thumb is that you must sell 100k units for every million dollars you invested into the development.
Last I heard an average Wii game cost $10M. It's tough to say what these games cost, but I think it's safe to say that nobody comes to market with a game (that's not Wiiware) and expects to sell only 100,000 especially with the Wii usesrbase at 50+ million and expanding at least 1+million a month. This is a problem. I know these are niche games, but unfortunately these are some of the better games to hit the Wii.
There's a reason Iwata told people not to do pricedrops. I preordered NSMBWii from Amazon while all 360 games I bought were significantly below MSRP (most expensive was Brütal Legend at 55€, MSRP 70€, second was Prototype at 40€ and it goes down from there). That's in part because Nintendo also starts out with a saner price (40-50€ instead of 70) but also because you can be sure the price won't drop much.
I think first it's a general problem in our economy right now. Look at other retail items. It's I won't buy this until Thanksgiving sales, or after Christmas sales, or until the government makes a program incentivizing me to purchase something. And I think in general consumers are still scared to purchase, job cuts are still coming in the areas I live. I think my job is secure but the more businesses our area loses even I wonder when my business won't make enough to support itself. So their is a problem in the environment right now.
However, having said that, I think your argument is more for digital distribution than companies not to decrease prices. Nintendo has clought in retail. While Excite Trucks is nary to be found at retail, most stores with have a few copies of Galaxy or Twilight Princess at $50, because they know when people buy a Wii these two titles have a good chance of being picked up as well. Most developers don't have that luxury. Retail in general wants to see turnover if they are holding your products. So if a developer like Marlvelous takes this stand they can expect fewer sales to retail because retail doesn't want to gamble on sales.
It also doesn't mean a sale won't occur. Retailers often hold unofficial sales to get gamers in. And it's sure with the games mentioned at some point the retailer is just going to decide to dump their product at whatever price they can get for the copies because they see 20+ new releases a week, they like the cycle of games sell for 6 months and then dump.
Digital games don't have this issue. It cost a fee to run a server, but to add one game to a server to hold available for download costs almost nothing. So if 5 years after release someone downloads LKS or whatever, it's almost all profit. A retail wouldn't hold a game for 5 years (without it continually turning I.E. Galaxy) because it takes up space for them to be selling something else to their customer that will turn.