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When developers are lazy, this is what happens. The Wii is capable of producing graphics better then the Xbox, but it's all up to the developers.
The PS3 version has a lot of problems with pop-up too, at least in my game. I expect better!
On the PS3, there is tons of pop-up, and I just noticed that when you get a certain distance, Pedestrians become 2-D and look like the crowds in old school sports games, and they move like they're on wheels. When you get close to them, they all start to disappear. They really should have worked on these issues.
And yea I agree those are some pretty terrible graphics. I just wonder if the gameplay is any good or not.