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I find it hard to believe that they couldn't forcast demand despite its performance in Japan.  This isn't exactly a complex piece of electronics and likely could be produced in the tens of millions if needed by factories in Asia.  I really think if there hadn't of been a 360 price drop Nintendo would have pulled the same trick with the Wii.

 

http://www.gamesindustry.biz/articles/fils-aime-admits-wii-fit-supply-will-fall-short-this-christmas

Fils-Aime admits Wii Fit supply will "fall short" this Christmas

Nintendo's Reggie Fils-Aime has said that there will not be enough supply of the Wii Fit peripheral to meet demand this Christmas.

"With Wii hardware, I think we've got a good shot at meeting demand during the holidays," Fils-Aime told Forbes. "With Wii Fit, I know we'll fall short."

He also said that he doesn't think a number of third-party Nintendo developers fully understand the potential of the Wii, leaving them unable to find success with their products.

(more at the link)