IGN had an interview with Mike Capps, President of Epic Games, and one of the things they talked about is why Epic doesn't make Wii games. Capps says it's because Epic Games wants to go forward, not back:
IGN: Yeah, oh yeah. And everyone hates it at first. "The Wii?! Motion-sensitive controllers? What the hell is that?"
Capps: I know, the name. We all say Wii now and never even think about the name anymore. They know what they're doing and they make money better than anyone else does. As an investor you love 'em, but as a next-gen console technology maker, they don't run UE3 and they can't.
IGN: Is there any chance that Epic will ever, is there going to be a point where there are too many Wiis on the market for you guys to not make a game for it?
Capps: No, we go forward, not back. It makes more sense for us to invest in the next-generation tech. There have been shops that have done it. Red Steel was a launch title and that was on Unreal Engine. So it's been done. How you take an engine that's all based on shaders and materials and run it on hardware that doesn't support shaders is just impossible. It's about as easy as PSP for us. Maybe it would make sense, but it makes more sense to invest going forward.