Good observation. Basically summed up my comment before I made it.

This was the case long before the Wii even existed.  I would wager that the Wii actually makes the problem worse -- you can't risk large dev costs on the Wii with so much shovelware competition and an untargetable (i.e. general) audience, but at the same time, it takes a reasonably large cost to create a decent game in the first place.  If 3rd parties actually do up the Wii budgets from the 25-50% of the HD budgets that they are now, their risk will go up even moreso.

25%-50% budget for Wii titles doesn't mean they are the same quality of title as a typical HD title.  A shovelware game on the Wii costs 25% what a AAA game on a HD console might take, but the potential profit margins are not necessarily better (yet).

Publishers have been playing this ugly gambling game since the mid-90s.  30% is actually an improvement over what it was then.  Its the blockbusters that make money and save publishing companies -- hence the increasing budgets of games over the years, and the willingness to risk more, while upping the bar and bringing the games industry to its current state.

Publishers have been claiming that it costs 1/4 to 1/2 the cost of a HD game to make a similar Wii game ... Basically, it would a game that cost $100 Million to develop (like Grand Theft Auto 4 or Metal Gear Solid 4) would probably cost in the range of $25 Million to develop for the Wii

Shovelware is drastically less expensive to produce than an AAA game, and most shovelware games will sit with tiny budgets ($500,000 to $1 Million I would expect) because they're designed to be profitable off of the initial sales to retailers.

I have to say that you are quoting bad science here. You're gonna have to prove that, for example, developing Super Mario Galaxy cost significantly less than, for example, the latest Ratchet & Clank.

GTA4 and MGS4 are some of the most ridiculously high-budget titles of all time. They are *not* good examples. Most AAA games cost way less than $40 million to make, and $1 million does *not* produce a Wii shovelware title -- not even close.  Again, feel free to name some examples that did.

Since you seem to be the uninformed one, why don't you look at the dozens of interviews with third party publishers which have claimed that HD games cost 2 to 4 times as much as Wii games.

What people don't seem to get is that it takes far longer to produce the highly detailed models and textures that are required in HD games (and you need to create additional textures in order to apply the material effects), and you require far more of these objects and textures because the high detailed environments look sparse without being more heavily populated. When you combine these factors it explains why so many HD games cost so much more to develop while still having much shorter campaigns with less gameplay modes than similar games of the previous generation.

This is self-evident really.  If you want higher quality, you will have to pay more for it.

The important thing to realize is that the game costs more to make because the bar of quality you're shooting for on one platform is higher than that of another, not because of costs inherent to the platform itself. 

To put that a bit differently, making a game that is visually identical on the Wii and 360 would have comparable costs.  The 360 version would not magically become 2 to 4 times more expensive simply due to being on the 360.