Actually putting a Blu-Ray drive in the Wii would be basically the same thing they did with the Wii, where essentially they used regular ol' DVDs.
They planned initially to allow for DVD playback, but cut it out because by 2006 that was too late to really be worth the trouble.
I think it'll come down to cost ... if Blu-Ray is the cheapest option, I think they'll be hard pressed not to choose it, and it probably could be at the rate its dropping in price right now.
A propietary format, only made for Nintendo, only made by one vendor likely is going to be more expensive, especially as time goes on. Blu-Ray will cost peanuts by 2011/2012/2013 etc.







