Budget would depend a lot on how many people worked on it and for how long, which could be quite a mystery. Sora didn't exist till 2009, so even if it began development right after the company was started dev time would be 3yrs and a couple months. A note on the Wikipedia article for
Kid Icarus is stating some interviews in 2009/7 was before the start of development of KI:U, if this is to be believed that's 2yrs, 8mos. It _seemed_ like it was announced ages ago (and it was) but really, actual dev time isn't as long as you may think it to be. Considering it's a portable title you could surely shave off some graphics work cost vs a HD game, so even if it was expensive to make for a portable game it'd probably be cheaper than most PS3/360 offerings. All speculation, of course.
Does its moderate success mean it was a disappointment to Nintendo? Probably not. Nintendo's routinely made core titles that sold poorly for a variety of reasons (see: Xenoblade, which didn't even sell 100K at launch), but development isn't killed off, likely because they're needed to flesh out the lineup of a console. It's great that N spent the advertising money to get KI:U the attention it deserves, but other than their renewed focus on the 'core' audience their game-making habits haven't much changed.