How is it petty? If the game really is as bad as reviewers and Nintendo themselves make it out to be and its less that its glitchy and more that the core design of the game itself is bad then yeah, I'd say its a completely fair move for Nintendo to not release it.
It really seems like Nintendo were banking on the whole "developer legacy / cancelled project people were excited about" lightning to strike twice as per Bayonetta 2, but quietly shied away after it was clear that the game was sub par at best. It's no wonder no one bothered to pick it up before Nintendo stepped in - performance is one thing people might blame on it being shifted to the Wii U but the game itself doesn't even look good visually and the game play is apparently not even fun? The game is looking like a misfire on every level which is kind of tragic considering how long it's been in development hell. I have to ask what the hell happened with the development of the game and how Itagaki failed to live it up.
They're the only company to ever release a Nintendo game in North America AFAIK. Did Doshin the Giant see an NA release too though?
On topic this makes me sad. NoA passed on Disaster Day of Crisis for the same reason and were so wrong about the quality. It is in fact my favorite Wii game. I prefer for us consumers to judge a game for quality though I can't fault them for running their business their own way.