IGN Australia has done an interview with MadWorld producer Atsushi Inaba and he answered a couple questions about the game and the Wii
One of them stands out:
IGN AU: What are some of the technical tricks you're using to achieve this look?
Atsushi Inaba: It is visually very difficult to play a game in black and white. Sometimes you cannot see enemies or items. How can we create beautiful screens without sacrificing the good gameplay as an action game? It was the challenge. Sometimes people say that "MADWORLD is not utilizing the Wii's hardware potential because it's simply in black and white", but it's not true. We are using the Wii's hardware performance in full power.
Now, this could easily be a translation error and he was just trying to say that the game isn't running below its potential by being in black & white.
It's possible, however, that he meant that MadWorld is using all of the power available in the Wii. A big difference, but we're guessing he meant the former.
Check out the full interview here for more details on MadWorld.