Oh, I bet they did. Probably every CEO and every accountant and every middleware dev and a bunch of bankers and investors that's spent a lot of time and a whole load of money tooling up for the HD revolution wakes up one morning to find they are being trounced in the market by a tiny white SD box full of 2001 tech?
You got to either wish it to fail or admit to one heck of a costly mistake. Most people wouldn't admit the mistake.
Bloody hell, according to some people at developers, we had actual software engineers who considered the Wii an insult to them and didn't want to be forced to code a decent rendering engine for it. It isn't a myth that people did want the Wii to just go away.
I think, in retrospect, Nintendo not being sure if Wii would succeed caused them to be too conservative. They should have gone just a LITTLE bit further - either built in the tech for motion+ (aka, the fixed version) and/or increased the hardware capability just a tad more. Enough for basic HD output @ 720p, and a modest increase in graphical ability.
In an alternate universe, I think we should have been seeing a Wii with those specs, producing AAA motion control games like Skyward Sword, or even A games like Red Steel II, from day one out of the box, and consistently year after year.
Playing a game like SS, for me, is a peek at what might have been, had 3rd parties actually put real games on the Wii and not treated it like a red headed stepchild. The entire point of the Wii, besides accessibility and content for the mainstream, was to be a platform for unique experiences that leveraged their uniqueness against not having the highest tech graphics possible at the moment. Wii aged badly and quickly, unfortunately. Just a little more oomph might've staved that off.
Plus the ability for 3rd parties to stop their bitching and be able to at least the basics of their HD assets and production methods on the Wii.
I feel like Nintendo gave up on the platform some time ago.
This has always been Nintendo's problem IMHO. Their legendary conservative business sense doesn't always mesh with keeping an entertainment platform alive. When all signs point to yes, and they can be assured a platform will thrive, they'll open up the warchest and spam the platform with trillions of games - witness the DS' library. When things are uncertain, they'll help dig their own platform's grave by clamming up and putting minimal effort into it.
It sure seemed that when Wii Music flopped, they entirely faltered and stopped all development of games aimed at the "Wii ______" audience. It's insane that after Wii Sports Resort was finished, they never made another meaty package like it using M+. Wii Party as their final game in that series is crazy and insulting. Likewise, they already had games like Galaxy 2, Donkey Kong, the Kirbies, and Zelda in the pipeline by that point. But it seems clear that they just stopped developing stuff after that and coasted. Thus after a splurge of big games in 2010, 2011 stretches out into a ghosttown again until the final Kirby and Zelda game hit. NOA didn't help this, by treating their core audience like crap; stuff like Xenoblade was created for a reason, to fill major gaps in the library and prevent dry spells while EAD's big guns were busy.