There is already strong anecdotal evidence in favor of backward compatibility (see Gameboy and PlayStation lineages). It is not, however, essential all of the time (see NES/SNES, etc). Here, I intend to outline the case for why backward compatibility is crucial for Nintendo in the transition to the Revolution.
The primary advantage seems to be obvious - it gives the revolution a large library from the get go. While this is helpful, I would argue that it is not the primary benefit of backward compatibility. Think for a moment what happened near the end of the N64's life. On the whole, it just died. New games and probably also sales both just tapered off into oblivion long before the GC came out. It may not be obvious, but that hurt the GC. Nintendo, without a stream of games, just fell off of people's radar. This hurt Nintendo's image coming in to the new generation, and thus hurt the GC. I won't claim that what happened to the N64 was because of the necessary lack of backward compatibility. I will argue, however, that a lack of backward compatibility could do the same to the GC. The reason why is the real reason for maintaining backward compatibility: maintaining software investment. Both developers and fans invest a lot of money in game software. Maintaining backward compatibility helps to protect any investments made late in the console's life cycle. Gamers don't have to worry about whether or not they'll be able to play their brand new games in a few months time without the inconvenience of changing TV hookups. This is even more critical for developers because it makes them able to continue developing software for the old console right up until the end without worrying about the user base evaporating completely in a couple months - keeping a healthy perception of the console and the company that makes it in the public mind.
That, in short, is why backward compatibility is critical for the Revolution: without it, the GC will likely falter, pundits will hail the death of Nintendo at the hands of Sony and MS, and the Revolution launch will be blunted because of it.
Sadly, backward compatibility for the Revolution is not sufficient to prevent the GC from faltering; many believe that it already has. Still, it is best not to make the situation any worse than it already is. Sony, and probably even MS can handle the PR hit from breaking backward compatibility. Nintendo cannot.
Interestingly, this argument tells you exactly how far your backward compatibility should extend in a console: 1 generation (or however long it takes to protect the investments based on game life cycles). The library argument, if it were the primary reason, would advise maintenance of backward compatibility forever. This argument puts a limit on how much backward compatibility is worth the effort, and how much is not. Granted, there is some small benefit in more backward compatibility, but it is small compared to the first generation.
BlackGriffen