Putting in higher detail doesn't just require more disc capacity, it also requires greater processing power. If you get too many polygons and high-res textures on screen, the system will slow down, simple as that.

The only thing dual layer discs really allow is more content. So for Metroid: Other M, it worked because of the great amount of FMVs they had. For Super Smash Brothers, which also used dual-layer discs, it had a massive amount of levels, character models, extra content, etc. 

The reason why Nintendo doesn't usually take the Super Smash Brothers approach is because it sucks up a lot of their resources. Several development houses had to pull together to get Super Smash Brothers out the door. As a business, they would rather make smaller games that sell better (Wii Fit, Wii Sports Resort, etc.)

Why should they?    Their strategy is for a lower-end , lower-cost hardware and software, with games that are used more creatively.  Don't expect them to read your post and start making more dual-layered games.

Standard definition doesn't exactly need 8.5GB... There are some games that benefit from having so much space but I doubt most games are like that.

says the guy with a black dude in his av

There is no point. Zelda Twilight Princess on Wii and GameCube were both 1.5 GBs. If you can make a game that good with that little space, there really isn't any point in maxing out the space you use on a disc.

It's not about how good the game is or not.

It's an audio issue. Nobody in zelda speaks. That is why it is 1.5gb.

Had it been completely voiced it would be pushing 7gb

Voice isn't necessary to a good game, just as a good game isn't better by not having voice.

Good point. I didn't think about it like that.

Yeah, the funny thing is that in mgs4 there is not one video. It's all ingame-cutscenes.

It takes up that much space due to all the dialogue.

FFXIII says hi (360 version) 

are the rpgs you're talking about completely voiced?

If so, it's probably low quality audio.