Yeah, it raises costs, but that space is much more valuable than it ever was in the PS2 era. This is an area people are going to compare against the next-gen consoles of today & the future. If they don't do it now, they're going to have to rerelease the system like Sony upgraded the PS3.
Also, same day physical/digital communicates a big priority shift. If a customer can't buy a Wii U and be able to download a launch title to it out of the box without a costly accessory, isn't that a tough sell?
I suppose they could make like Microsoft and sell a beefy version and the equivalent of a X-Box 360 arcade. But they should give customers a choice. With this route, it just seems so counterintuitive to not make storage a priority.
I would suggest that it's not the medium, but the quality of perception and expression, that determines the significance of art. But what would a cartoonist know? -Bill Watterson