The reasons the Wii is so cheap to dev for are:
1. Cheap dev kits.
2. It's an overhauled GC so if you've ever developed for the GC, it takes less time to learn the Wii.
3. The big one, NO HD REQUIREMENTS!
Most of development costs come in the form of manhours, as the price to employ competent modelers, artists, music composers, animators, programmers, designers and writers is where all the TRUE costs come from.
In the case of HD, every texture in your game must be able to display at 720p, meaning that your artists need to spend nearly 2X the manhours on every texture in the game, your modelers need to have 2X as many polygons so the models don't look like total ass, etc. etc.
HD requirement, depending on the game, can just about require you to develop a game twice, hence why the Wii is so attractive as a platform because, with a rising userbase and far less risk in terms of initial investment, devs stand to make more money, and money is always the bottom line here.