There's a lot to be said for the pricing of the games, and I absolutely agree with you there.
And the iPad 2 is already capable of some serious graphical performance, but it's never going to take off as a "serious" gaming platform without any damn buttons.
I love my iPad 2, and have plenty of quirky games on it that work great with the touch-interface. But actual quality experiences akin to console or PC games are completely non-existent.
Exactly this. And I don't believe the argument that 'the masses' don't understand the beauty of real buttons/sticks. It's just nonsense. 'The masses' are drawn to simple touch games because they're accessible and on cool smartphones. But lots of them are aware that 'consoles' exist, and can quickly appreciate/describe how they deliver a different experience.
There's no denying that many people will be satisfied by what touch gaming can deliver. Such people typically have a limited interest in games, and it's enough for them. And that's fine. But as long as big budget, console-style games remain the biggest business (which they will for the foreseeable future, whether rendered locally on a console/PC or streamed via OnLive-style services), there will
always be an understanding that YOU NEED BUTTONS for this kind of experience.
So there will always be a market for a handheld with the layout of a console controller (the closest being the Vita, so far).
Will the next generation of consoles kick ass? Yes. Will people want those experiences in their hand? Yes. Vita 2 could deliver this, but ONLY if it has buttons. The cycle will continue.