There are two factors at play here ... Nintendo grossly underestimated demand for the Wii, and Nintendo's conservative nature has prevented them from rapidly increasing production to meet demand in fear of over producing Wii systems. Building up stock of Wii systems is not surprising and displays an understanding on how this market works; between 40% and 60% of hardware purchases are made in November and December with the vast majority of them being non-delayable purchases.
Nintendo (from my limited understanding) continue to increase production every quarter but even if they supply an additional 250,000 units per month per quarter they're going to have a great deal of difficulty meeting demand in non-holiday months without creating massive disapointement in holiday months.
Basically, Nintendo could ship ever unit available today and probably nearly meet demand with the consequence of it becomming nearly impossible to find a Wii at christmas, they can make the Wii nearly impossible to find now in order to make it readily available at christmas, or they can make it somewhat difficult to find now and somewhat difficult to find at christmas.
