Well, I tend to think Dead Space both was not marketed very well, and also suffered from a general lack of originality. I mean generally speaking the game rocks if your a genere fan of "haunted" space ships, such as the original "Alien" movie, "Event Horizon", or recently "Pandorum". It is however a niche genere and has NEVER seen massive mainstream success despite having a number of cult classics.
Part of the problem is also that game companies are increasingly afraid to produce truely "M" rated games. Oh sure, they'll be "disappointed" with what is going in with Australia, and talk a game about how President Obama is wrong, but none of them are willing to actually DO anything, and ultimatly they wind up backpedaling on content despite their "disappointment" as opposed to fighting to release it.
The thing is that most of the Wii "M" titles I'm familiar with are not really "Mature" rather they are so bloody over the top and unbelievable with their violence that it's hard to really bring in the "M" crowd, but rather simply focus on a sort of kiddie-M rated violence. What I've seen (screenshot wise) of "Dead Space: Extraction" was largely garish and over the top.
See, with a true M-rated game it's not just about the splatter, but context. Truthfully the Wii has the potential to produce some truely startling M rated titles, but nobody is willing to go there. I look at "Manhunt 2" as being the only REAL attempt to make a game that could be considered "Mature" on the system. "Manhunt 2" failing because of the contreversy, and Rock Star backing down and putting in the violence filters and such, ultimatly leading to people like me going "WTF is the point?".
Honestly, when the Wii first came out, pretty much everyone and their brother thought it would be awesome to use the Wiimote as a sword and fight. Yet every single game I've seen that tries to do this messes up horrendously, and it seems like there is a desire to avoid making ot too visceral or realistic. As a result every "T" rated sword playgame has failed. The only game that seemed to come close here (and also had an M rating) was "No More Heroes" and again that game was so over the top that I'm not even sure if I can truely say it was "M" rated by correct standards. Sure plenty of blood, and some sexual innuendos, but in the end I don't think it did anything that hasn't been done at a PG-13/T rating before people started getting to touchy again, and the industry stopped standing up for itself.
The Wii has great potential to cast you as a sadistic, stalking killer, or cast you in the role of a gritty and brutal warrior slaughtering his enemies with a mighty battle axe in hand, but in general nobody has the guts to do it. Heck, even away for violence people have joked about the potential for sex games on the Wii, but nobody has even gone there for a minigame... your "hot coffee" minigame could be hot indeed if the industry grew a pair.
In the end, it comes down to the defenses of Valve for their backing down. Basically the companies are cowards. Don't blame the console, blame the producers and companies themselves.
If anything I feel the lack of "M" game development for the Wii is specifically because of it's intense potential for the genere. The 'controller in hand' scheme lends a defensible level of detachment from game content and the player. This is less so if your actually torturing someone, killing, fondling breasts, or sexually thrusting using a wiimote.
So basically when the industry desides it's time for them to remove their tails from between their collective legs, organize some protests and counter "offensives" through whatever means are needed (legal, extra legal, we all know how the game is played), we'll finally see some success on this platform.
See my impression of "Dead Space- Wii" is basically "Alien Syndrome rides again". Madworld struck me as being rather stupid and overly stylized. Sort of like "No More Heroes" but not as clever. Pretty much looking at NMH and basically figuring that if they made things over the top enough they could get away with things, while missing the entire point. Suda didn't make NMH to be over the top to avoid persecution, that's just how he's always rolled going by games like "Killer 7".