Both gamers and developers want some more headroom for games. The Wii HD could support max 720p and have only 1.5x better performance and it would benefit from 3rd party support immensely. Don't be tricked into thinking HD is only about uncharted graphics, its not. The wii currently just can't handle mid to high intensive games. If the Wii was beefed up to handle mid level intensive games it'd hit the sweet spot of 3rd party interest.
That said, I still hope that Wii 2/Super Wii/Wii HD comes out with a standard ergonomic non-motion controller in addition to the motion controller its obviously going to have. If it weren't for the lack of a good non-motion controller my wii wouldn't collect so much dust.