Ok, It has to be admited, DVDs are not Next-Gen, they where the main format of Xbox and Ps2, althou GameCube used Dvd, they where MiniDvds, that didnt hold as much as full dvds.
Many GameCube ports where as big as the other versions, even with reduced disc space. But they had lower graphics because of that.

The fact is, more poligons, models , textures, equals better graphics, and this equals more space.

The reason X360 and PS3 need more disc space is because of HD-TV.

Wii doesnt have HD-TV, so it will do just fine with common DVDs.
Nintendo figured how to make games on par with the other sistems, with their smaller discs. So Wii games could hold more information, better graphics, more gameplay... whatever.

Think of a GC like game, like Twilight Princess, its a game developed for the GC, it has like 100 hrs of gameplay, this is alot, but a Wii game could hold much more gameplay, because they have much more space.

We are going to see Huge games, with a LOT of content. Think a Oblivion like game, this can be achieved on Wii, and think automatic updates throught WiiConnect. this generation will be a gaming revolution...