My personal feeling is that Nintendo was trying to make a third type of system, that wasn't a Console or a Handheld. At the time the VB was released, Nintendo's Game Boy was the undisputed master of Handhelds, and the only competition in the Console sector was the Genesis, which wasn't doing to hot compared to the SNES. Nintendo thought "Well, we basically invented the idea of a handheld/portable gaming system 6 years ago with the Game Boy, why not make an entirely new genre of systems so we can get another 300$ from every kid in America."
Unfortunately, there were hardware and software issues with the Virtual Boy, and nobody wanted it, and it died a quick death.
Wii has more 20 million sellers than PS3 has 5 million sellers.
Acolyte of Disruption
