There are several reasons why Nintendo has chosen proprietary formats rather than using established standards with their systems.
The Gamecube’s optical disc format was a constant angular velocity disc which greatly reduced seek-times and therefore reduced loading times ... A friend of mine ended up modding his Gamecube late in the generation and there were noticeably worse load times because he used standard 8cm DVDs.
With the Wii piracy occured so quickly because Nintendo made a similar mistake as Microsoft made with the XBox 360. They both assumed that the system would be secure if they just ensured that the game had to be digitally signed and run off of a standard game disc; unfortunately, it isn't (that) hard to get an optical disc drive to report to the system that a DVD-R is an official game disc, although the Wii was a little more secure in that it needed a mod-chip to do this. Now (unless there is a massive improvement in networking technology) moving up to a multi-layered blue-lazer based optical disc format will effectively make the security on the Wii and the XBox 360 effective enough to limit piracy ... few people really have enough bandwith to be able to download 50GB or more for a single game.
One thing I don't see happening in the next generation is a return to a memory based format even though I would like that to happen. I think that next generation consoles will continue to use optical discs for their big-budget fully priced games but there will also be a dramatic increase in the quantity and quality of digitally distributed games ... I wouldn't be that surprised to see Nintendo follow the path of the iQue and produce a memory card (of some sort) that players could plug into a vending machine at a local store and download a game if they did not have (good) access to the internet.
