Barely outselling the Wii when your main SKU is $100 more would be very telling...wouldn't it? If anything, it would tell people that with the proper mix of price, marketing, and software, the HD boxes do stand a chance in the world according to Nintendo. That's a pretty important message, especially for the Sony camp.
And if we look at it from MS' perspective, their objective this fall has always been to bury the PS3. They even said so a few weeks back with their bold 'guarantee' of victory over Sony. Selling at a mainstream rate when neither console has reached a mainstream pricepoint would make it even tougher for the PS3 to comeback. You must remember, as little as 3 months ago MS fully intended for GTAIV, Too Human, Splinter Cell, and Lost Odyssey to be out this fall as well, on top of Halo/Orange Box/Bioshock/Mass Effect/Madden/Guitar Hero/COD4 and the price drops and the new game bundles.
They aren't fucking around, they wanted to put up Wii-like numbers this holiday season despite the price point.