I think a better question would be who would develop it?

It's not beyond Nintendo's monetary resources but I doubt they'd do a racing sim internally.  Maybe Monster Games?

Bingo. Nintendo doesn't even have the resources to do their own stuff anymore (hence no F-Zero, Waverace, Starfox). They're hardly in a position to take on something so resource-consuming (especially when it likely wouldn't distinguish itself, since the nature of racing sims is to be as real as possible)

no i dont think they should make one with the hardware constraints it wouldnt turn out as good as gt or forza

lol.  Honestly, I can't think of a genre EAD could have less interest in than racing sims.  Well, maybe a cinematic RPG or a competitive FPS.  Let Nintendo stick to what they do best (platformers, arcade racers, adventure games, communication games, brain puzzlers, etc).

Nintendo did make a few moves into securing a racing sim during the GameCube era though.  Namco's R: Racing Evolution was originally conceived for GC at Nintendo's request (though Nintendo backed out of publishing and it went multi eventually) and Nintendo had a small team at their Canadian Technology R&D group (NTD) working on a GC GT clone, but the project never went anywhere.  Probably for the best they never got into the genre, it's really not a good fit, and racing sims are on the decline now anyway.

Yeah can you imagine what Gran Turismo would be like on less powerful hardware? I certainly wouldn't want to see any game like that on the PS2 for example.

They have Mario Kart that beats both :P

Or the PS1. Imagine how horrid it would look :P

Stop it guys, you're giving me nightmares.

A racing sim on the wii? prob not :/

Since you asked, I'm gonna realize your wish: