exactly, its a shame that great games sell bad because they arent as good looking as others big budget games..

OP: HD games need to have higher resolutions, that means bigger amount of polygons and bigger amount of time spent

I promise you every game changes over time.  You can have absolutely perfect planning and you will still always have touchups, better ideas, improvements, and feature creep.  It's just one of those inevitable things.

This right here is the primary reason game dev costs have exploded: more complex textures, more complex models, more complex animations, etc.--essentially, the artwork requirements have gone through the roof and soared up through and beyond the stratosphere and have far, far outstripped costs for programming, design, and nearly every other aspect of actual development (we won't even get into some of the more egregious marketing situations, where many games are treated like Hollywood summer tentpole pictures in their advertising outlay).

This to a pretty big extent.

But according to Capcom they moved Monster Hunter 3 to the Wii due to high PS3 development costs.

http://www.gamesindustry.biz/articles/high-ps3-costs-prompt-capcom-to-move-to-wii

PS: RPGs are not really my thing so I may be committing some mistake here in assuming this is a JRPG.

Perhaps they believe expectations are lower on the Wii, and thus they could reduce their scope/cost?

I've personally ported a reasonably advanced Wii project to the PS3 in just a couple weeks (basically by myself), with no performance hiccups at the end.  Its very easy to do if the code is mostly C/C++.

Oh yes, regarding the code part I suppose the costs aren't much higher for certain projects at least as you said.

But what about the artistic assets, surely you didn't use the Wii ones without any changes? Especially textures.

People still get away with that, look at cod4 for example, its the best selling HD game, and its graphics are not very good at all.  The game has N64 textures at best in many places.  And the game is native 600p.

Actually I had source textures which were already larger than the Wii could handle, and they made an easy transition to the PS3.  The models would have to have been rebuilt, if the artists wanted to take full advantage of the RSX's speed, of course, as you suggest, but again we had high poly source from the initial concepts, so reducing that source less would not have been overly difficult or expensive.

Adding some funky shading techniques, and textures for it, would have taken some time, but not really anything substantial, relative to projects which are designed with the 360/PS3 in mind to begin with -- you'd have to go nuts with a Wii-sized game's rendering costs, for which the levels are inherently small by design, to really tax the PS360 and require a lot of engineering/art time.

Its the ambition of the big projects (they are almost always over-ambitious, and have to be toned down iteratively) that drives the cost.  The art improvements are relatively trivial by comparison to the zillion features and ultra performance + super shader techniques (one or the other is easy) that an originally high-end design calls for.

The fact that the Wii is very close to the original XBox gives anyone who worked on the XBox, last gen, a pretty big advantage, from the design perspective.  They already have a good idea where the high-bar is -- Thus, less iterations in development, and the end cost gets cheaper.

Back to MH3... they reduced its costs by making it less cool, and they don't want to ship a less cool title on the PS360, for fear of ugly critical comparisons.  ...and lets face it, MH is the craze in Japan, and so is the Wii.  The Wii will drive JRPGs this gen for that fact alone.  You can call that speculation, as I suppose there might be only one knowledgable PS3 programmer for hire near the developer of MH3, and he costs $1B yen per year or something, but... I think that my speculation is probably pretty close to the truth.

Wii: much more potential sales in Japan, less critical audience.

PS3: less potential sales, more critical audience.

The same game would cost the same to make on both platforms, even though it would look better on the PS3 (Actually, heck, it'd be cheaper on the PS3, since you wouldn't have to optimize it).  PS3 owners expect more, there are more Wii owners, and they are much less demanding when it comes to features or technical whiz-bang.  JRPGs don't really need to "wow" their audience to be great (I know MH is kinda a wierd Action RPG, but.. whatever).  

Capcom made the obvious choice.  MH3 will be the coolest MH ever.. compared to the PS2 and PSP ones, of course.  If they were trying to fit a Wii-sized game on the PS3, I would wager the PS3 version would actually cost less -- but the potential profits would be far lower, so it doesn't matter.  That, and a Wii-grade game on the PS3 would only really be critically acceptable (to the demanding PS3 audience) if it were a less expensive PSN download.

Apart from better looking games I have really seen many that are meeting these so called high expectations of yours.  Most of are just the next in a series.