"Only days after Nintendo shipped Wii Menu 3.3, which stopped the Twilight Hack from working, the team lead by Bushing brought out a new version of the Homebrew enabling hack for the Nintendo Wii using the Zelda Game and a hacked save game."

This tells us that the wii allows content executables to run at a root/system level of elevated privilege.

No matter what Nintento does, they have no way to remove this security hole in way that would break the massive distribution of popular older software like Zelda.

The least ineffective solution at Nintendo's disposal would be to only run external executables in an isolated virtual machine.

Even that would suffer the same flaw. If the virtual machine is sufficient to run a game like Zelda with middling level demanding 3d graphics, it can offer enough resources to run a user provided, OS alternative.

The only solution I can see would be for Nintendo to implement a hash checking method in addition to VM architecture. The most effective method being copying to local storage before running and then running a hash check independant of the game media.

I don't know much about wii hardware, but I'm guessing it doesn't have enough storage (or at least storage fast enough to be acceptable for consumer expectation) for this to work.

So, it doesn't matter what Nintendo does, the wii will forever be a hackable platform.