First of all, none of us are saying Wii is a bad business decision, just that it's a piece of shit product that is over priced and aimed at a market that none of us, who used to buy Nintendo products, still fit into.
Wii will probably make a lot of money for Nintendo, but since I'm not Nintendo, I don't give a shit about their profitability. It's 1999 tech being sold for an outlandish price with a shitty software line up with one bright spot being two Gamecube port overs. It's going to have worse third party support than GC and even less varied library.
Nintendo is abandoning the traditional game market to pursue the brain training group like Drinky said. Whether or not this will be successful, I don't know. DS did not abandon the traditional games market, in embraced it, and I think this universality is key to mainstream success. The PS2 embraced universality and the GBA embraced it, and both machines dominated their market. The DS also embraces it and it's doing incredibly well. The Wii eschews it.
I think Nintendo is overestimating the power of a brain training to sell consoles though. The DS is impulse buy priced, it's portable, it's self contained, and it's easily shown to friends and co-workers. It's cute and girls like that, and it's easy to operate and I suspect many people throw it in a drawer after a few sessions and forget about it for months. A console is a different animal altogether. It's more cumbersome, it's a bigger investment, it takes up TV real estate, it's not at all self contained, it's no longer easily shown to friends and co-workers, and the type of 10-20 minute game play sessions that suit the DS won't suit a console game session at all. Let alone all the set up and configuration that the Wii will require to make the wagglewand work. I don't think a non gamer would want to put up with the required set up, room dimensions and lighting conditions that are necessary to get the waggle wand to be accurate. It's not as easy as turning on a DS and tapping the touch screen. The Wii will not be as intuitive as most of you think.
I suppose the better term to use instead of "hardcore" gamer is "traditional" gamer. I don't want to be stuck with SD resolutions in order to beef up Nintendo's bottom line. I don't want to be forced to deal with an entirely new input method for all genres when it would only help a few. There is nothing wrong with the traditional control pad for Ninja Gaiden, for example. Waggle would not improve that game - having to swing my sword would be cumbersome, tiresome, and not at all precise enough to work for that game.