If I remember correctly, they got the patent for motion controls from the owner who designed the system they used years after it had been invented. There may have been production cost differences between 2001 and 2006 to the former's disadvantage, but it was possible to create a Wiimote in 2001.
Having lived through that era, the biggest thing that held Nintendo back after the N64 was that they were battling (and re-enforcing) the reputation of being a kiddie company which wasn't helped by Luigi's Mansion being one of the three launch titles. When 2005 rolled around, there was a "here we go again..." fear from us Ninty fans when the first chatter about the Wii was about Miis and Wii Sports; thankfully the PS3's "Riiiiiidge Racer" launch took some of the heat off Nintendo and allowed them to finally break that reputation with the realistic Zelda we all wanted after OoT/the Space World tech demo.
It may not seem like much now, but having the average age of a gamer still below 30, but rising well above 12, at the start of the century did a lot to color the market at that time. For those who didn't live through it, here's a great synopsis of what it was like to actually live at the time (I personally saw it as a drawback from the upbeat optimism of the late-70s and 80s but others will have nostalgia for the time):
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