I thinks its success is a lot to do with the fact its just plain and simple fun, and as a bonus it does encourage people to become more active when playing games.
Its one thing making a really in depth game that goes on forever and is pretty much a simulation, but its hard to make games like this that contain a real fun element. Whilst it might keep the person playing the game engrossed for hours, maybe days, these arnt games that people will pick up and play again and again, and play with friends etc...
At the moment, Nintendo are getting a perfect balance of fun and simulation, thier new concept of controlling the game is just something that has been promised for years, but Nintendo are the first to actually deliver it.
Until Sony and Microsoft realise that games are not made solely based upon graphics, and stop bragging about how much processing power and how many teraflops and how many megapixels their machines can produce in a constant war of numbers, they will not catch up with Nintendo.
Upon the full announcement of the Wii, Microsoft themselves said that they were actually far more worried about the impact the Wii would have on the market rather then the PS3. I suppose its because the PS3 and 360 were predictable, same old same old, Sony and Microsoft at war, nothing really new except better graphics, whereas the Wii is sitting in a neutral position, offering something totally different and with far more mass appeal.
Given the power (or rather lack of) of the Nintendo Wii, I question if it should actually be considered as a seventh generation console, sure its an improvement power wise over the venerable Gamecube, but at most its only a touch more powerful then the original Xbox.
What the Wii is achieving however is the fact it is redifining gaming, in a way never seen before. In the past, every generation of consoles has been predominantly impacted upon and defined by graphics improvements over the previous generation. Nintendo have stuck a spanner in the works with the Wii, by rebelling against the trend and attempting to provide something totally different for a change.
Some people dont like it (especially Microsoft and Sony fans, even more so PS3 and 360 owners - they wont want to see a smaller, less powerful, cheaper console dominate the market), but the majority love it. And who knows, when the eighth generation comes along in 2012ish, we may find ourselves looking back at the Wii as just another games console that failed... But then again, we may also look at it as the games console that redefined gaming, and forced games consoles to move towards a different direction in development. We may just call it "the revelution" (ie. the original Nintendo product codename for the Wii from 2001 until 2006).