The term next gen has always meant newer technology, more expensive hardware, and better graphics. Sorry, that's how companies, including nintendo, sold us new consoles every 5 years or so. Now that nintendo came out with a "weaker" system, the rules have changed? So don't get annoyed when people say the Wii isn't next gen, as by most people's definition, it isn't.
As well as the wii has sold, it's still like comparing a nissan to a mercedes. There's nothing wrong wth saying the truth. The 360 and ps3 are marketed first to a completely different type of consumer. The Wii is succeeding because it's going for consumers who would have little interest in a 360 or ps3 even if the prices were equal. Nintendo has much more pick up and play and family friendly games, plus their core franchises appeal more broadly across ages, gaming skill, and gender than what halo or gears of war ever will. Nintendo also took their console back to the easy playing days of the NES, when controllers had a dpad and two buttons. Anyone could play super mario brothers, the same isn't true for most of today's games, which has kept many people out of an enjoyable hobby.
In my opinion, you could also ask plenty of critical questions about nintendo's products as well. Both the DS and Wii have their fair share of 3rd party shovelware crap games, as companies fail to see why nintendo products appeal to people. Nintendo consoles have always been primarily supported by their own 1st party games, and the same is true with the Wii. Most hardcore or longtime gamers also have experience or know that nintendo has a history of slow release cycles with their big games, and their consoles are prone to periods of drought because of weaker 3rd party support. I can't remember the last time I saw a period of time like last fall with the 360's flood of great games on a nintendo console. In the end, it works for them though.