Before 3D became a viable mainstream goal, 2D games were still very much subject to the mad dash for graphics. It was always true that anyone looking for an one-up on other games could claim the best graphics prize with no imagination or risky gameplay innovations. It's just that 3D graphics were seen as automatically superior when they came into play. Nowadays, the games that are 2D are normally done so for a reason (or because they're Flash games) and so the graphics are far more likely to be stylistically significant than the someone just making a game by the numbers.
2D graphics also were refined for quite a long while before the shift to 3D. It's difficult to get a fair comparison between, say, Spacewar or Pong and Star Fox on the SNES or Super Mario 64. Ever since early on in gaming, sprites on backgrounds were generally how graphics were implemented. Up through the SNES (and continued with the GBA), the changing toolbox for game developers mostly consisted of beefier hardware to do the same thing, letting them refine the same basic graphics more and more. 3D games include a hell of a lot more clipping issues, texturing, and a lot more interplay between subsystems in the graphics than 2D. It's a shift in design philosophy, and still isn't worked out to the degree that 2D graphics currently are.
Edit: As far as the Wii, it's partially rabid marketers attacking a new demographic, refurbishment of an old technology (see the Power Glove), the same hype that comes with every system, and genuine innovation. I do like that they're trying to focus on more than constantly improving graphics (and think they made a brilliant marketing move by abandoning Sony and Microsoft's to fight that war with eachother; not selling the consoles at cost and for cheaper is a large benefit). That being said, we're still exploring the new technology. It's going to take a hundred developers remaking earlier games with worse controls before we get a few gems that couldn't work without the Wii's unique peripherals. And hopefully the good parts of those gems will be emulated to make better games overall.