It is the exact same thing as when people said that the Wii had nothing to do with the current HD twins, I.E. it was a 'completely different market' so they counted it separately like HD consoles AND Wii to the side. Of course when the Wii started selling with <30% market share it was 'allowed' to enter into the current generation game market because it wasn't as much of a threat to peoples ideals.

What they needed was standards support. I.E. They needed to support the DX9.0c/10 pipeline, not some random DX7/8 mutated offspring. They didn't need to run games at 720P, all they needed was to run current generation games, even poorly, at 480P without forcing developers to support a completely different toolset and featureset.

The issue was that they never really believed that the Wii would be the success it was. They were going to price it @ $199 when in the end it sold out for years@ $249 and often sold north of $299. The market wanted to pay for a $299 system from Nintendo but in the end they got a $199 revision on a last generation platform. Third parties never believed in the Wii because Nintendo never looked like they believed enough, and by the time they got on the bandwagon the horse pulling that particular cart had long bolted from the stable. It takes 3 years to make a good new I.P. game, they lost their third party support well before 2006 and by the time they got it back most of these titles which were developed to take advantage of the Wii's success were likely cancelled before completion before the end of 2011. You'll never get exclusivity from developers who don't believe in your system and that is the hand they dealt.