Personally, I see publishers/developers blaming the platform for a games poor sales is (effectively) like a professional sporting team blaming "The Referees" for failing to make the playoffs ... Certainly the platform can have an impact, but countless decisions they made in the production and release of the game all have a much larger impact. Off the top of my head, here are the reasons I think Madworld struggled
1) Art Style. From Okami to Killer 7, countless games that create a non-photo realistic art style end up suffering. Potentially, down the road, a couple of big breakout hits with their own style will change this; but (for now) pushing a distinctive style is a good approach to have an unsuccessful game.
2) New IP. Across all platforms, most of the most successful third party games have been a sequel to an established IP; and most of the successful new IPs have been one of the best games of the year and had a massive marketing campaign.
3) Unconventional Genre. While there are elements of Madworld's game play which are similar to some popular games, I don't think there is a game that has ever been like Madworld which has been successful.
4) Short and yet highly repetitive game. After I completed Madworld I thought that the reviewers were not harsh enough on this title because by the time you were getting close to the end of the game it was getting pretty boring. To make the game (much) more enjoyable at its length it needed (nearly) twice as much to do in the game, and to make the game really a worthwhile purchase it needed (about) twice as much game play.
5) Insignificant local multiplayer and no online multiplayer. Look at the most successful games on any console and notice that the majority of these games have multiplayer modes which are as important (or more important) than their single player game.
If these factors remained unchanged it is unlikely that the increase in sales Madworld would see by being released on the HD consoles would compensate for the increased development cost.
