The problem with the HD Wii theory is that it represents a massive misunderstanding of Nintendo's corporate strategy. Nintendo is attempting to disrupt the games industry by shifting the line of progress from increasing horse power to increasing interaction. Nintendo is creating a new generation of gamers (both the older expanded audience and children) whose concept of gaming revolves around physical interaction, or at least, ease of use. Look at Nintendo's best sellers; Wii Fit, Wii Sports, and Mario Kart. All of these games have crummier graphics than other games released by Nintendo! Why? Because Nintendo is trying to remove graphics as a metric for progress. In doing so, they remove many of their competitors greatest strengths (I speak of both manufacturers and third parties, ergo the lack of support).
This is why at the beginning of this generation, Nintendo said they would not be competing with Sony and Microsoft. Because they were going to remove the very paradigm on which Sony and Microsoft compete. And if they can convince an entirely new generation of gamers that graphics don't matter, but interface does, while simultaneously leading the industry in interface advancements...
You can see where they're going with this. Nintendo's rejection of high end graphics and pimping of motion controls is a very hostile competitive strategy. Sony and Microsoft have seen that threat and are attempting to follow Nintendo. With their new motion control devices; they are competing on the new paradigm that Nintendo has set. Ergo (concordantly, vis a vi), if every console improvement is based on motion control or physical interaction (Natal, Sony wand, motion plus, balance board, heart rate monitor), than Nintendo will always (not really, but they are for now) have home-court advantage.
Baring all that in mind, why the fuck would Nintendo make an HD Wii? Making an HD Wii would be going backwards for Nintendo. It would be going back to the days when improving graphics meant improving the experience, and it would be playing a game that Sony and Microsoft have already won. Nintendo has set up the chess board so that Sony and Microsoft are now at least one move behind, and are racing to catch up. Turning around and following your lagging competitors by doing what they already do best is not exactly a fucking masterstroke.