It is Nintendo's fault because when Nintendo realises one of their titles, many third party titles are forgotten. In this sense, I like that the end of 2008 only brought us Wii Music and Animal Crossing. At the very least, games like Call of Duty, Shaun White's Snowboarding, Sonic Unleashed and others had decent sales.
Trying not to dwell on that, I think that one of the biggest reasons so many bad games are released is because it's the perception that bad games do indeed sell. For example, Carnival Games has the metacritic score of 56 yet it's a multi-million seller. Also, Nintendo's not innocent of this. Wii Music has the metacritic score of 63 yet it's also a multi-million seller. To try and make some connection, bad games are easy to make and sell so that's what to go for.
In summary, there's little movitation to make interesting/good games with the Wii's control scheme because it's just as profitable to make a 'new Carnival Games' or 'new Wii Music.'
Pixel Art can be fun.
