"If I were asked if a Wii that's been made compatible with HD -- just high resolution compatibility -- would be bought by players throughout the world, I'd of course say, 'Do you think it will sell with just that? It needs something new.'"
Sounds like Iwata has it figured out. I think HD is really something that appeals more to core gamers than to the casual market that makes up the vast majority of Wii consumers. Even in the core market, HD by itself wouldn't be enough to justify the purchase of a new console. It looks like Nintendo will wait until their next "next generation" console to jump into the HD market.