As crappy as the Legends-engine looks, please bear in mind, that Legends uses big outdoor levels. Battle-stages for a fighting game are much less polygon-heavy, so a fighting game should look far better then Legends. As has been done for Gamecube with Windwaker's engine, which was reused in Twilight Princess, but in that case it was more a change in textures and renderfilter (celshading) then polygon count.
But I am not amused. IF they scratch a whole bunch of graphical greatness out of this engine, then they can rest alive, but if not then... then I will not care for SC-fighting on Wii and mourn for a proper sequel.
Wii can handle it, but not every booby-waggle and hair-swish you see on PS3. But it hasn't to. Just check SC2, it's still graphically wonderful!