Team Fortress is on the 360/PS3 no?  What does MK:Wii have to do with anything?  Mediocre game that is only made decent by playing with a friend.  Not every game needs Co-op or splitscreen.

And anyone who played split screen games like Goldeneye 64 or Perfect Dark 64 can attest to the horrible frame rate drops experienced in the split-screen variations of the game.   They were still great fun,  but definitely suffered from issues. 

  The biggest reason these features aren't implemented is two fold:

        -   Any slight performance drop will get them slaughtered in reviews.  (Notice even a slightest MENTION of frame rate   drop in KZ2 no matter how minor and everyone jumps on it.)

        -   Online gaming wasn't available/mainstream back when split-screen was at it's peak.

Team Fortress 360/PS3 versions are just an afterthought, ports without much value. Valve's games are designed for PC where splitscreen is useless on games requiring mouse.

I certainly don't think they were afterthoughts but I agree Valve games are PC first.  The game still went on to sell over a million copies between the two systems (Almost 1 million on Xbox 360 alone).

I mentioned MK:Wii since it proves that online splitscreen is a popular feature at least on the Wii.

I agree it's a good feature...But the question is how good?  Some games benefit from it.  Some don't.  I personally like Warhawk's 4 player multiplayer (On or Offline).  I don't think two games that have yet to be released have suffered from focusing on graphics too much. Not every game needs split-screen.  There really isn't many games that do splitscreen well anyways.

Regarding the last part of your post, why is it that Halo 3 and other popular FPS games support splitscreen or are getting late patches to add it?

Split Screen is a good feature but the cost/reward of actually implementing it, quite honestly isn't unless the game is widely popular. 

Halo did build popularity off of split-screen multi-player.   (It was a feature that they needed to keep since the original two had it). Again comparing the PS2/XBOX/N64/Gamecube generations to the current Wii/PS3/360 is Apples to Oranges.  There wasn't a well designed robust online system for any of the previous systems.  Multi-player HAD to be done with split-screen. 

However,  Halo 3's graphics in general suffered by the inclusion of these modes in the game.  Some would say it's worth it.  Some would say it's not. Maybe people would have been more impressed with Halo 3's presentation/single player had it been a better looking game?

Split screen is for local multiplayer, period. Do none of you play when friends/family are near the TV? I'd like for people to join me playing games instead of watching, and I'm not about to buy another console and TV just to do it.

This may not be as important for KZ2 (though I might actually consider buying it if it did), but The Conduit is on the Wii, which really stresses on having local multiplayer. Not including it is a big mistake, IMO.

Do people think Halo would have been as big a hit without its split screen? I wonder...

Highlighted the key point here. Local multiplayer sells software.

Look at the top 10 selling games for Wii. Eight out of ten have some form of local multiplayer.

Now look at the top 10 games for 360. Seven out of ten have local multiplayer.

Local multiplayer is one of the things that takes a successful game and turns it into a blockbuster. Not only does it make the game more fun for many customers, it's one of the best ways to advertise your product.

Imagine you're at a friend's house and he wants to show you his sweet new game. He turns on his console and starts playing, and sure enough, it looks like he's having fun. Maybe you'll get yourself this game. Now imagine he hands you a controller and you're both playing the game. You aren't just watching your friend have fun, you're having fun with the game yourself. Now you've gone from thinking "maybe I'll get this someday," to "I've gotta have this so I can show it to all my other friends."