The Dreamcast shadows aren't stencil shadows. They are a PowerVR2 exclusive feature called "modifier volumes", which are very different:
A stencil shadow volume is drawn after the scene. It interacts with the Z-buffer to "mark" pixels which are inside the volume in the stencil buffer. Then, the render can do blending only against the marked (or unmarked) pixels.
The modifier volume relied on the PowerVR2 unique tiled deferred rendering. It didn't use a z-buffer nor stencil buffer: it could determine, per pixel, if a polygon was inside or outside a modifier volume (via ray-triangle tests) and use a different material if so. This "material" could be darker, brighter or even use a different texture (but this was rarely used).
It was much easier to use than stencil shadows: set "modified" material, enable a flag, draw the shadow volumes. Reproducing it on the Wii is not trivial for someone not experienced with the hardware, specially on a game that was probably ported on a tiny budget with a programmer or two.