I suspect that the PS3 is probably not capable of emulating the Wii, but that is only because it probably does not have enough RAM to keep such a massive program in memory in addition to the overhead it needs to actually run the game. Still, the PS3's processor and graphics card would eat said program for lunch. And seriously, give me a break about the PS3's graphics card not being able to handle the Wii's graphics. The RSX sucks, but the Wii's GPU sucks more. Compare specs: PS3 RSX, Wii Hollywood.
Oh, to all you "zOMG the PS3 can't emulate the PS2, so it must be weaker than the Wii" people, there is one reason, and one reason only, why the PS2 is so damn hard to emulate purely with software: Its graphics card uses EDRAM, and its graphics card's memory bus has a bandwith of 48GB/s. Yes, that is 48 gigaBYTES per second. 48 GB/s = 384 Gbit/s. (I definitely wouldn't complain at all if I could get that speed out of my internet connection...) And that was a decade ago. Even today, ten years later, that is still significantly faster than any CPU memory bus except triple-channel connections (which have an extremely high theoretical speed compared to most real-life performance). This is why PS3s with full backwards-compatibility had to have at least some of the guts of the PS2 under the hood. Nothing else in the world can even come close to the kind of performance that EDRAM can deliver (without trying extremely questionable jury-rigs). Interestingly enough, the Xbox 360, which has a 256GB/s GPU memory bus (again delivered with EDRAM), is one of the few widespread devices that could undoubtedly emulate the PS2.
<insert awesome signature here>