I think this discussion needs merits and classification for judging console of the year.
Xbox 360
This last year, Xbox 360 finally got its wings to start soaring. A few outstanding games came out. There online presence is strong with Xbox Arcade bringing updated classic games to play. And overall, the system was available to purchase and most if not all of the earlier problems with the 360 were resolved. However, it is old news and almost all the hype for the system is gone. Basically, the magic of Xbox 360 is gone...and I don't know if even Halo 3 can bring it back.
Wii
The Wii is a cultural phenomenon. It's unique control system captured the hearts of media and the world bringing a new interest in gaming. Games became simple and fun again...and most importantly the entire system felt accessible. Nintendo really does have the potential to broaden the market with this thing. For this reason alone Wii should deserve the hardware of the year. It isn't about power as much as philosophy and importance of the system. And, the fact that Wii is the only system with actually new experiences with their games is important too. However, Wii is old technology, and nothing screams high technology...not even the controllers. Revolutionary yes...but high tech, not really. From a hardware point of view I can see why the Wii would be voted down.
Playstation 3
Remember when the Xbox was launched and it was heralded as the most powerful console of the generation and it was a huge deal...but then turned out to not be anything. Well the PS3 is in that situation now...however, this time the new most powerful system for the generation actually may live up to its promises. With Blu-Ray Disc for movies and game storage the PS3 is more ready to take on high definition graphics. It has the space required for HD textures, sound, movies and is powerful enough to display these games. From a hardware standpoint the PS3 is incredible at $600.00 and as one looks at the potential of the system, one could easily declare it hardware of the year. However, potential is nothing without games to play the system and without actual systems to sell to the public. In this regard Sony has failed miserably...and as much potential that PS3 has to be the console of tomorrow; it most definitely is not the console of today or 2006.
My opinion would sway towards the Wii being the true console of the year, because of that cultural shift it may be creating, and the media attention it has garnered. The Wii is a bold step in a DIFFERENT direction for gaming. One that still values simplicity over complexity in all areas of its philosophy. Cost, Design, Functionality, Games, Control. And it is even fighting to broaden the market of gaming not continue to shrink it.