Well if multiplatforming becomes more apparent between the next gen consoles with Wii included and PS2 - Wii porting ends, I think making Unreal 3 a reality for the Wii would be a great thing.
Maybe it's not necessarily an Unreal 3 for Wii these companies have in mind, but a built-for-Wii Unreal Engine. And I think that's a good thing. Develop it, build it with pre-made "Wii shaders" to make shaders easy to produce and implement for games, and license it out. Only thing I would fear is so many games looking the same like what has happened with Unreal 3 licensing. But good looking games is better than crappy looking ones, right? Honestly I think Crytek should look into the Wii, it's the potential for them to become a household name overnight if they can make a great version of CryEngine for Wii and make games with it. Also Crytek knows how to make efficient engines that really maximize the capabilities with the system. It's just too bad that proper CryEngine tuning wasn't made with Far Cry: Vengence.
Just think if Epic, Crytek, and even Valve jumped on board with specific Wii development...........it would be awesome!