In fact a thought that just occured to me, perhaps the reason Wii is so simple is because Nntendo were hedging their bets and had a contingency plan case Wii was a flop. If so it wouldn't have lost them a huge amount of investment. If they had gone with a PS360 type high-end system and Wiimote proved a turn-off, they'd have been scuppered.
Nintendo would have had to have incurred the full fixed cost of researching and developing an entire game system and then quietly eaten that expense without ever selling a unit to defray the expenditure.
Besides, if the Wiimote PS360 system failed, what would have stopped them from going without the Wiimote (when there's so much software on the Wii that has or really should have done that anyway)?