You know, the questions you guys raise are really good. The conditions of my fabulations aren't well expressed.... :(
Okay, so let me be a tad more clear. In this fabulation, the HD-Wii would still have motion controls, would still focus on casual gaming. It would still be able to sport SD visuals if needed.
The only difference would be that it would also offer a traditional controller (for certain companies really wanting it), something far better than the CCPro. I know the cube was supported by the Wii, I have a jap white Wii-model GC controller (smacking new). But envision something that was wireless like the Wiimote, but based off the Cube controller's design, in other words a bluetooth GC controller with minor improvements (like the shoulder buttons and c-stick going more mainstream design).
Imagine this console had a solid online infrastructure.
As for price, what if Nintendo went loss-leading and sold it at the same price as the Wii? Assume something less powerful than the 360, something in line with PS2 to Xbox weaker.