I think consumers don't value graphics as much as you give them credit for. There is a large number of consumers that demands better graphics than the Wii puts out, but the number of consumers that demands the best graphics available is actually quite small, as evidenced by low sales of high-end PC cards.
You are talking about video cards that have a shelf life of 12-18 months for this purpose, cost as much or more than a console alone, have a much smaller software support base for the hardware, and have piracy issues.
While no one doubts the market of people willing to get the "best at whatever cost" is small, that isn't the same as people who value graphics.
It is the same issue of casual market generalization.
Also, note that there is not exactly a huge demand for social games in HD.
How are you defining social games?
Online multiplayer gaming by definition social and the HD consoles dward the Wii in this regards. The growing popularity of non-competitive online mutliplayer to augment (not displace) online social gaming is proof that this market space continues to grow and evolve to cater to various consumer desires.
Today, it's Gears of War and Madden NFL. The success of such game types are probably more correlated with system power than other genres, since youngish males like to boast about having the best stuff. However, its lack on Wii probably has more to do with Nintendo's marketing strategy than system power.
Madden is a perfect example, but for a totally different reason. First it is important to note that NFL football is the most popular sport in America and is a massive marketing property that appeals to a huge segment of males and even females. The NFL isn't niche by any stretch of the imagination; it is simply a major force on standard TV, Cable & Satalite, radio, print, etc.
EA has put a lot of marketing muscle behind the Wii version and the sales continue to lag. Are graphics part of this? Probably some--we are talking about a product that mimicks real life so players want to see a game that mimicks the real thing. But the PS2 version stayed strong for a number of years after the 360 launched so it would be unfair to put all the burden on "testosterone" males.
A bigger problem, imo (and I do play Madden and know a lot of people who do), is that as much as the Wii version caters to the waggle and has special accessible modes this version fails to capture the essense of the game. Madden is a evolutionary product that over 20 years has helped drive and fashion the consoles we currently have. There is a reason gamepads have a large number of buttons--in a game like Madden gamers want to interact as realistically as possible and be in control. That means replicating wide arrange of movements quickly. The Wii-mote is laggy (there goes quickly) and simplified which is a hurdle to gamers reproducing the results when they want, every time. The Wii, in its effort to make a break and redeploy to a more accessible oriented audience created a hurdle for these games because they fall short of mimicking the licensed product as well as the competitors.
Even if I am wrong, and hormonal males drive these sales, the reality is this market generates sales on an annual basis no Wii title, or 360 or PS3 for that matter, can match. GTA is the closest competitor on year in, year out average sales.
The Wii really has had big issues attracting movement in these markets.
Of course some people don't really care about these things, a lot of people in fact, and the Wii has clearly connected with these gamers.