It's simple, really. Once the Wii is successful at what it was sent out to do, everyone wins, especially the graphic whores.
Massive penetration into the mainstream means actual justification for mega hundred million budget for games. $40 million($20M promotions, $20M actual game production) for Lost Planet was already considered too high. Imagine what they could do with $100 million for production alone. More customers will ultimately mean considerably cheaper software, considerably cheaper systems(imagine the PS3 at $300 right out of the gate) and accesories because a larger number of people are footing the bill. Why do you think movies, even though they cost considerably more to make than videogames cost less to enjoy? $50 vs $10-$20. Yup, it's because the market is significantly larger than the videogame industry.
It also means more people would enter the industry, more creative talents, more games(yes, even more games that graphic whores will like), more "art" videogames(if you thought Okami was the pinnacle of arthouse style video games, you haven't seen nothing yet) and actual stories with actual depth, not some cliched mess. With all due respect to talented videgame developers out there, save for a few legendary ones that are almost godlike anyways, the industry could use more Steven Spielbergs and more Quentin Tarrantinos. The industry should be able sustain more people of similar pedigree if the Wii is succesful at expanding the market.
The Wii was sent out to bake that larger pie for the whole industry. I suppose some belt tightening is in order. You won't see the immediate effects of the Wii, probably not this generation. It's not capable of Gears of War, Halo 3, MGS4 kind of graphics after all. But the future of videogames might just become brighter, thanks to the little bugger that would.