i don't think backwards compatability was really a big concern because nintendo was thinking about the end user, but more for the developers. nintendo wanted a machine that was different, so that's what they made. but they needed a way to bait past developers to the system. having a machine that can run existing code, can be developed in a familiar development environment, and be ported from other popular consoles would make developing for the machine a no brainer for the first year or two because you can revive dead projects or port existing projects with little to no work except with the interface.
nintendo used a similar strategy with the DS. look at the GBA games that got ported over soon after the system launched. some japan only GBA games like pheonix wright turned into big hits on the DS with (relatively) little developer effort. licensed games were released on both platforms (GBA and DS) with little difference beyond a few touchscreen menus or extra 3D levels thrown in and made a quick holiday buck (star wars III and robots come to mind. they even sold at a premium on the DS).
look at the shovelware the DS got after launch, and look what Wii is getting right now. these are the titles developers/publishers will use to test the waters of Wii development. if they can use port an existing title over, learn a bit about the hardware, learn about the controller, then sell that software that they basicaly used as a learning tool at a profit, well that's a pretty big incentive to develope for the system.
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