Mario Kart will continue to sell well throughout the life span of the Wii along with Wii Play, Wii Fit and presumably Wii Sports Resort. Very bad comparison as Conduit does not hold the same appeal as any of these games to the broader Wii user base.
If you had a very casual gaming household (a significant percentage of the Wii user base), those would be the four most likely titles you'd see on the shelf.
Conduit is targeted directly at a small minority niche within the larger Wii user base and doesn't have the legacy of core franchises like Metroid or Zelda or Call of Duty that still enjoy broader appeal.
While HV made a legitimate attempt to make Conduit more market friendly than say Mad World, while still being targeted at the core gamer audience, initial sales of Conduit appear to simply reflect that there is limited appeal for games of this type within the broader Wii user base.
Flop? No. It should pass 1m in sales which is successful for nearly any title, regardless of budget. But the pre-game hype led to unrealistic expectations for many. Almost as unrealistic as those who low balled their estimates in order to declare overwhelming "success" when initial sales surpassed those unrealistically low figures.
Best measure for whether a game really flopped or not would be the number of copies pressed and shipped to retail vs. the number of copies actually sold. Unless we start seeing Conduit go on sale at major retail outlets within the next month or so, it's safe to say that sales likely fell within Sega's projections.