Re: On one hand...
"Why bother? Do they think it's going to take away sales from dirge like Wii Music?"
Well, I mean...it isn't necessarily about what they think it'll do to sales of their games or hardware. Nintendo isn't just a game and hardware maker; they're also an art, fiction, music, and character production house, and if they believe music they've written and hold copyright to is being infringed, they may well feel compelled to address the infringement no matter what it will or won't do to sales of their other products on the other side of the wall.
Now, I will admit I've only done a cursory examination of the sheet-music thing, but I found something interesting in the article you link to about licensed sheet music: the statement "the original artists were receiving royalties for sheet music sales."
The original artists aren't necessarily the holders of copyright. It may be possible (and note I'm not saying that it is, only that this is possible) that Sheet Music Boss might sincerely believe they have a legitimate license with the artists to produce sheet music for the songs, and Nintendo might legitimately believe that the artists don't own the copyright, it does, and it didn't sign any license.
Again, not saying this is what happened, just using this as an example that sometimes IP licensing can get really complicated really fast, and it's possible for the two opposing sides of a copyright spat to both go into the courthouse in full good faith, each with a sincere and compelling reason to believe it is in the right.
Disclaimer: Nothing in this post should be interpreted to assume that I am "on Nintendo's side" (nor, for that matter, on the side of the pirates or the publishers of Nintendo sheet music, though as far as the pirates are concerned, let me just say it kinda almost looks like they were BEGGING to be sued, with the bowl out and the puppy-dog eyes of that one boy in Oliver Twist).