I'll use golf to illustrate my opinion. On the Wii, my favorite golf game graphically is the Wii Sports version. I think it looks better than Tiger Woods and Super Swing. the Tiger Woods version looks more realistic; however, to that end, it does not look real. Thus, Tiger Woods fails to measure up to its benchmark (reality) whereas Wii Sports golf effectively blends its the resolution, palette and animation to meet its benchmark (style over reality).
Furthermore, I like Wii Sports golf better than any of the next gen golf games. Granted, they are beautiful looking games; however, they do not look real, which is what the graphics are intended to be. So, while they have higher resolution, poly count, effects, et cetera than Wii Sports, I prefer the stylized graphics offered on the latter.
In fact, I don't think I want ultra-realistic graphics. To me, the people in next gen games look creepy. They are so realistic yet have empty, dead eyes. They are like moving mannequins. The sweat-drenched NBA game is about the best example of this that springs to mind. Others enjoy and desire the ultra-realistic graphics, which is fine by me, and I am excited to see what they can accomplish next. I just don't necessarily want to play them.
Some say, "Yeah, but PS3 and X360 could look exactly like Wii Sports if they wanted to." I agree 100%. But they won't. People drawn to the HD consoles tend to prefer the realism, thus, that is what they will get. Wii, by necessity, will steer clear of realistic graphics.