This is an old article but it's a long held Nintendo policy. They took the same route for the Gamecube and N64. The N64 really suffered as nintendo chose RAMBUS ram which rose in price near fabrication and they had to halved the memory to 'make money on day one'.

Because the Wii is largely an upgraded NGC it was easy to make money from day one as hardware R'n'D costs were a lot lower.

If you live in North America then there is a shortage of Wii's because the dollar is weak and Nintendo can make more money in Europe. Europe recently passed N. America in terms of number of gamers and money spent on games so I don't see this 'shortage' issue changing for quite a while.

Having said all that Sony are not in a bad position either. the PS2 and PSP are still selling stong. the PSP has recently picked up in N America and Japan (more then just the latest Final Fantasy can explain) and PS3 will continue to be refined to make it cheaper and more reliable.