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See what I mean by no win scenario? If Nintendo puts any serious backing behind this they'll be bombarded for spending resources on this instead of [insert desired game here]. If they don't people will say they aren't supporting the game or console fully. If they don't publish it, they'll really get blasted.

Oh and I think this supports my theory: they backed Itagaki and his reputation, probably gave him almost complete autonomy. And then he screwed the pooch and Nintendo didn't see it coming til it was too late. Modest budget or not, your game should at least be competent. Poor bet on Nintendo's part, but poor form on the devs too.