The economy has been in decline. The Wii still sells well even without new games, because its the most affordable of the three. Its the most recession friendly option.
But the $200 Xbox 360 is a much better value, because it has more games than the Wii (most of which are also higher quality). But you can get also get a PS3 for only $50 more, which gives you a large hard drive and Blu-ray capabilities out of the box. Both the Xbox 360 and PS3 are also all-in-one media boxes, capable of streaming video, music, etc. from the web.
Yes the Wii is cheaper, but the overall experience is lesser than what you'd get on either a PS3 or Xbox 360.
It feels like it's 2007 all over again...