Nobody says a thing when The Last of Us, inFamous 2, Little Big Planet, Forza 2, Uncharted 3, Lego Indiana Jones, Kung Fu Panda, etc. are HEAVILY bundled for free.  

Very impressive from a numbers perspective.
As a non-casual gamer though, it doesn't speak much of it's quality of games for me when Wii Sports, Wii Sports Resort, Wii Fit, Wii Fit Plus, and Just Dance 2 are on the list.

No doubt they may be well polished and achieve what they set out to do. I'm just not convinced that that is something that's appealing to most core gamers to spend money on. Quality may have actually been the wrong word. A game can be simplistic but still a good quality game. But if it is simplistic enough, I may not want to shell out money for it. Monopoly is a quality board game. But I wouldn't buy the videogame version. And seeing it sell 10m units would not make me any more interested in finding out if it is interesting after all, when I know the majority of it's fans are people who are interested in different types of games than myself.  Meanwhile, if I see a "core" game sell 10m+, I'll more likely look into reviews for it and see if it's anything for me. Unless it's alled Call of Duty. (There are exceptions too, obviously.)

Well that's one reason why I didn't use the term casual. Nintendo also found a market in something called the "non-gamer". And I think those can often be quite different from your average "casual gamer", even though they're often grouped together under the same term. The non-gamer can be a 47 year old mom, who buys Wii Fit to do yoga. Or a 70 year old grandpa, who plays Brain Age for DS on the train ride home. The DS and Wii attracted many of these consumers as well. And most of them have since moved on to mobile gaming.

But obviously core gamers are also interested in those types of games as well. It's just that that's not all we play. Where's you can find people who just never stray far from their Madden, Call of Duty, GTA, etc. That doesn't make them bad games though. I myself loved GTA Vice City, Goldeneye 007, and NBA Jam and played them to death. But since my interests in games are far more diverse than the average "casual" gamer, I can probably grow tired of a series after a few iterations more easily than they can, or demand more out of a game for my money.

I played Wii Sports a few times, and I had fun with it. But I probably would buy it or any of the other games on that list.
So when it sells that much, it doesn't make me wonder if there's something to it that I am not aware of. Amazing story and character development, epic music, stunning visuals, deep gameplay mechanics, rich lore, cool characters, etc. I just think, "I know the jist of what this game is like, and I'm sure some people with similar taste in games as me bought and enjoyed it. But most of them were probably people who don't have my taste in gaming. So there's probably nothing here for me."

I can be entertained by games that don't have a deep story, open world, or complex combat system, etc. But I'm certainly not as impressed by the "quality" of the game compared to a game that does have these things. I don't know what other term to use, but I hope that it makes more sense now.

And it was one of the worst moves for consumers.

The Wii definitely did. Just that the non-gamers I was refering to (which Wii and DS had plenty of) might be more inclined to pick up the sequel to Wii Fit rather than check out Xenoblade. Gamers like you and I are more inclined to look into many more options. So as our interest in games is more spread out, so will our contribution to gamesales. But the non-gamewrs will only be interested in one type of games, for the most part, and so their money will be focused only on those games.

Gotta thank all those casual gamers, eh?

It's on both Nintendo and Third Parties though. Third Party Publishers didn't allocate any budget to the system until it was taking off, and by then, the quality of their games.....I mean look at the quality of some their games now and you can see.