Can't you just assume is everything at once? You know something is wrong when you take on Patcher's word for the Wii.

Bingo. Third parties have to try their hardest to prevent investor revolt, when they have a bad quarter, savvy investors are going to first and foremost ask why they're ignoring 48% of the console market. So they tossed a few low-budget bones out there, and it was a win-win scenario. If their crap somehow managed to catch on, hooray, we've got a low-budget hit (2K games, foremost in the piss-poor supporters of Wii, lucked out there with Carnival Games), and if they fail, then hooray, they can justify ignoring Wii to their investors, and they don't lose much money on it (Bandai-Namco hit that note with Soul Calibur Legends, and EA did tremendously with Dead Space Extraction)

To up the ante, they hire market "analysts" like Pachter and Divnich and Frasier, who then tell the investors to their face that high-quality Wii development is a bad idea.

I actually believe a Wii HD is on the horizon and it's going to release with super 3rd party support just like the 3DS is.  Nintendo is just making games to support the Wii in the meantime.  I mean I can be wrong but how often does Nintendo support a console after 5-6 years?  I mean that question literally I know the NES lasted a whole decade but the SNES, N64, the Cube, what were their life spans?  Again I actually ask that question cause I'm too lazy to check myself.  And the Wii is pushing 4 years.   Hell look at the DS; it's selling for no reason and they're replacing it with a 3DS for what purpose?  Nintendo's due for a hardware upgrade and it's a lot closer than people think.

I'd say it's a feedback loop. The top AAA developers (particularly western ones) tend to want to push graphical and technical boundaries with their games (not so much gameplay), so all the less experienced, not as talented devs are put on the Wii games, which end up being bad games, which don't sell well unless they're casual, which just reinforces the notion that the Wii is not a platform they want to work on. I wouldn't say they were morons or necessarily doing it deliberately (why would you want to sabotage something that has the potential for insane sales?), but lack of leadership and a mindset focused on technical advancement over new gameplay probably has a role. 

Regarding PSP, you would still be hard-pressed to call the ports AAA games, and the control schemes are fairly similar to the HD consoles'. Why would you want a dumbed-down port on the Wii anyway?

"Japan" is the obvious answer: that region matters much more to Nintendo than the rest of the world, and for what are probably some pretty good reasons.

Yes this is true; but I mean Nintendo just has a roughly 5 year hardware lifecycle.  It's been like this since the snes; only Sony really goes for a long haul and that's only been the luck of the draw.  I'm just saying Nintendo's in for a hardware upgrade and it's a lot harder to do what Nintendo does with its handhelds (Gameboy Color, Gameboy SP, Dual Screen Lite, Dual Screen I) with consoles especially with how small Nintendo makes their hardware; they just get hardware refreshes every so often and they're in for a hardware refresh soon.  Like Patcher just says whats on his mind and he feels Nintendo should make a "Wii HD" cause he'll probably buy one and he feels a lot of people will.  I just feel Nintendo's in for a hardware refresh cause it's just that time of the Wii's lifecycle.  And that makes sense as to why the Wii was so under powered as it was, by the time the HD consoles got a good gap graphic wise from last gen their next hardware refresh would begin.  I just think that hardware refresh is coming within the next few years cause it will fall in line with their last 3 hardware refreshes. 

They would sabotage it because the publishers themselves simply didn't want to work on it, but they needed to convince their investors that such neglect was the right course of action, hence: sabotage.

Their actions are deliberate. 

Nintendo doesn't work well with third parties.  Or not nearly as well as Sony/MS do.  I think Sony/MS treat third parties better as a whole.  The term wine and dine is probably most appropriate here.  In my opinion, this is something Nintendo has never been overly great at even in pre-existing consoles. As for this current generation?   I think a big selling point of MS/Sony right now is having this fully-fledged, robust online distribution service.  It provides easy advertising space for them, easy distribution space, and a whole slew of other options.

You have a staff of talented developers and you ask them to work on hardware that is essentially 10-15 years old?  How hard of a sell do you think that is?   You don't think that people at the cutting edge of their industry want to work with cutting edge technology?  I'm sure that just making fun games is a lot of motivation but don't think for a second that working with the latest technology and keeping up personally within the industry drives a lot of talented developers as well as well as challenging themselves with newer, greater technology.

We also have the factor that Third party games just don't seem to sell gangbusters on the Wii compared to the HD consoles.  So what is the point in bringing games that will get average sales at best to what essentially amounts as the 2nd place console market?  (HD vs Wii).   

Additionally to the prior note, I can say that personally, I've 'never' bought a Nintendo console for a third party game. I would imagine that many others are similar to me.  It always been Zelda, Mario, Metroid, Star Fox, etc first and other games second.   This is important because Third Parties games always are dealing with a slew of Nintendo-fans who are Nintendo games fans first and everything else second. (A phenomenon you just don't see from Sony and really only with Halo from MS).

In short,  Third Parties like Nintendo console sales but don't like third party software sales / typical or assumed userbase mindset /  features available for them to use /  Their staff of developers has more to gain by working on superior technology and as a result third parties are most likely pushing Nintendo to become more like the HD consoles (Atleast in certain ways). 

But why wouldn't the publishers want to work on it, the potential for sales before this 3rd party meltdown was huge and $$$ speaks the most to them. You can't tell me that a CEO like Bobby Kotick doesn't try to get as much money from whatever source as possible. If any sabotage was going on, it would not come from the publishers. And no developer would want to have wasted years of their lives sabotaging their own project.