If you looked at the percentage of potential customers who were willing to buy a particular console at a certain point in time it would probably look like a bell curve. As time goes on the mean value people are willing to pay gets reduced, and the bell curve becomes more distorted, because people have already bought the console; and newer ‘cooler’ gadgets come along taking interest away from the console.
As a guess, I would say that the mean price people are willing to pay for a console at launch is (probably) about $300 with a standard deviation of $50; and over an 18 month period the mean value is reduced by (roughly) the standard deviation, with the standard deviation being reduced by 20% (or, after the first 18 months the mean would fall to $250 with the standard deviation at $40, and at 3 years the mean would be around $210 with a standard deviation of $32, and so on). Now, if this estimate is within reason this would mean that the Wii started off being seen by most interested consumers as a value, and now (3 years after launch) most potential customers see the Wii as being too expensive.
Now, I should mention that not all consoles would be seen to be worth the same amount at launch and not all consoles will lose value at the same rate; but I doubt any console has more than 50% of potential customers seeing it as being worth more than (about) $350, and I doubt a console could go more than (about) 2 years without seeing a measureable reduction in demand at a static price without some heavy bundling or redesign.
With that said, I don't think the Wii's price had become a problem yet ... but the important word is "yet" and given another 18 months there would be few people who would buy a Wii at $250 or respond to a $50 price reduction.
