Well, this is Nintendo's gambit-- choosing a disruptive input mechanism over HD graphics. It may affect them later on, not in terms of sales, but the kind of games that will appear on the Wii.
Game programmers would probably want to program on machines that'll show lots of bells and whistles with (relatively) lesser effort.
We'd like to think "Oh, it's their loss if they don't make game xxx on Wii". But, somehow, they don't care. After all, some of these developers are doing pretty well in HD machines, anyway.