HD is just a resolution.
If the Wii was HD yet kept the same internal components... Games would actually look worse as that is more resources needed to render more pixels.

For comparative sake... My PC about 12 years ago actually had a larger than 1080P resolution, albeit it was a 4:3 CRT monitor with a resolution of 2048×1536, the Xbox and PS3 is natively 1920x1080, although most developers actually only render in 720P or below to save on processing power to be used on other things.
That 12 year old PC of mine wouldn't hold a candle to those consoles, despite it being "greater than HD".

So, stop thinking that HD = Improved graphics, it really isn't. It does however bring more sharpness and clarity due to much larger pixel densities and negating some need for Anti-Aliasing to remove jagged edges.

Also... From a technical point of view, it wouldn't cost that much to add "HD" capability to the Wii. All they need to do is add a DVI or HDMI port to the graphics chip or an image scaler. Probably a couple bucks at most.

Also, resolution doesn't stop a game from being ported, most game engines easily increase and decrease in resolution with ease, when a developer uses that as an excuse... You know they are talking out their poop hole.
A more accurate reason would be that the Wii doesn't have the hardware functionality to render Xbox and PS3 games in the first place due to inferior; Pixel and Vertex shaders which are limited in instruction length and functionality.
Not to mention the limited processing power and memory in the Wii.

there will be no Wii U

That doesn't change anything, DarkTemplar got the main point: the higher polygon-count and higher resolution for textures needed to make good looking games for HD, would have significantly increased development-cost and (worse) -time. As they did for PS360. Do you remember the beginning of the gen? Some bigger titles got delays and in the beginning the number of titles for Wii was bigger than for the HD-twins. It needed time to develop the better models and textures. With lesser games the Wii wouldn't become the runaway-success it was back then.

Darktemplar's point 1 is very valid, but that's why I tried to make myself more clear.

In my fabulation, this alternate Wii would also be capable of SD, low production graphics like Wii Sports. So Nintendo could still output the same amount of 1st party titles.

@Permalite: Try to understand what I mean, or ask me what I mean, ask me a question.

By your logic titles like Wii Sports would have had small cost increase (perhaps only 6 months more of development or a few more developers in the team) while other titles like Metroid and Zelda would have had ordinary HD budgets, right? If so, seems plausible to me.

Nice, I'm glad you see it! And imagine if this really was a fully hybrid system, that it could do Wii graphics and High-production graphics, so as to really let 3rd parties choose! So in the fabulation, Nintendo could actually do Wii Sports if they wanted to so as to cut down production costs. And then they could make Wii Sports 2 with more advanced graphics if needed (like Kinect sports).

Man, that would be sick. A true evolution of gaming graphics within a generation. I think the future of gaming consoles is all in flexibility. How much do you allow your partners to do on your platform.

Well, I believe the Wii U has the potential to be that console, but only if Nintendo is going to release Wii games for it (Wii Sports, Wii Fit, Mario 2D, etc.). Unfortunately we will have to wait until E3 to know what kind of first party game will be at it launch window.

That's what I was hoping. My only beef wast that Nintendo came up with this a gen too late, mostly due to their stubborn ways. Hopefully implementing this strategy one gen late will not hinder their plans of industry-wide success (my personal dream for Nintendo).