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I think so.
But IMHO it only affects 3rd parties with entrenched series and sequels.
People will associate the shovelware with the brand, and dismiss even their entrenched franchises. The worst is when they make shovelware with their franchises. A good example is Ubisoft.

And I disagree that only Capcom put some effort in the Wii.
Actually, I agree if you count only the big 3rd parties. But sadly or not, the best output have so far come from small dev teams like Grasshopper or Atlus. Atlus being small is debatable though.