Lets see. I have 15 games + ~ 5-6 games I rented, including SSBB and Elebits which both take +100 blocks, 4 VC games, the Mario Kart, Internet, Everybody Votes, Nintendo and Metroid channels, and I still manage to have 400-500 blocks free.
Space is not an issue for the majority of Wii owners. If I wanted I could easily delete 300 blocks worth of information, and I would not care one bit, nor have to re-download any games.
It would be wonderful if nintendo allowed games to save directly to the SD card like in SSBB, but even SSBB still uses 128 blocks.