With the combination of a focus on taking full advantage of the processing power of the Wii and an awareness of its limitations a lot could be done to create really impressive looking games ... and in extreme cases (for example building a game similar to Resident Evil 4) the game could probably stand up pretty well against some of the games on HD consoles.
The problem is that few developers will ever try because many publishers and developers took Nintendo's move away from advanced graphics to mean that Nintendo (and their fans) did not care about the appearance of games at all. While their is some truth to this, I would actually say that most Wii owners look for games that are good looking but not necessarily technologically advanced; and many of the more advanced Wii games actually look worse than a simpler stylized game.
