Ok, first off. The 1.8m per month info was put in their quarterly reports, if they are lying about that then they are also breaking the law and some Nintendo execs are heading to jail. So right off the bat we can determine that DMeisterJ doesn't know WTH he is talking about. Or do you think they would go to those lengths? I'd love to hear that crackpot conspiracy theory.
We can guess and speculate all we want about what is being done with the other units but its clear that at least some are being saved up for launches of major releases, some are going towards the Asian launch next FY, etc...For all we know they could be preparing to launch colors and trying to get a stockpile of them ready before launching. We simply don't know what they are doing with the units until they use them, but we do know they are making them because as I mentioned above they cannot fabricate details put into a financial report for their shareholders.
@OP,
The Wii isn't selling out in Japan regularly anymore and many parts of Europe are past sellouts as well (although not all parts of Europe). With that said I want to reiterate the point that there aren't a full 1.8m units reaching retailers every month.
As for the reasons for the short sales recently I really think you have failed to do some basic research based on the numbers you are using. The numbers I'm looking at right now show that this last week was the lowest Wii sales have been all year making it a horrible week to choose and multiply for average sales. In fact the average weekly WW Wii sales from the Week ending Jan 12th until present has been 289k a full 95k less than the week you used to multiply as the average weekly sales. I would say that is a bit of a problem with your analysis.
Now the confusion is probably that Wii supply has been so sporadic that you truly have to look at it over a period of time rather than a single week. A great example of this is that for Feb 9th in the US the Wii sold 216k and the following week it was down at 47k then on March 1st it was back up at 218k. I think its fairly clear these are supply fluctuations and not demand fluctuations.
Also I wanted to note that by my monthly numbers (every week ending in a month is considered part of that month) the Wii sales for Jan were 1.297m and for Feb they were 1.258m, both are a far cry from being less than 1m per month. And since March is a 5 week month and the Wii is already at 570k with just the first 2 weeks I would say its a safe bet that it will break 1m in march as well. So again I really think there was a breakdown in the way you went about your research.