Super Mario Bros. and even SMB3 took a lot less work to produce than Mario 64 or Sunshine. You could crank out an SMB3 in several months to a year, but a Mario 64? Yeah, they could use the same engine for a sequel, but you still have to create all those 3D worlds and bring them to life. Instead, Nintendo produced Ocarina of Time and Majora's Mask. I think they could've chosen to do another 3D Mario instead of another 3D Zelda (I would have preferred it, actually), but that's not how it happened.
I agree though, I wish there were more stellar platformers. Nintendo's development resources aren't infinite, though, and one of those resources is time.
@Alex: The Game Boy Color was just a proxy for the Advance anyway, but there should definitely have been a GBA Mario. I mean they graced the GBA with TWO Metroid games, and the N64 didn't get any!