You're right; we entered a global recession that we're barely getting out of and Nintendo just got humbled for having a pricey system. They're going to make an affordable console, not some technological beast.
I actually see this as being true.
I mean at most I saw the system having 5x something over the PS3/360. Maybe gigafloppers, maybe RAMses.
And that was at best. The truth is high priced consoles mean slow adoption, high up front cost, and just an all around stupid idea during a meager economic upswing.
Find a way to differentiate and don't ask too much from a bruised populace. Go loss leader if you want, but don't expect a home console to sell for more than $399 comfortably.
This is a reality console gamers are going to have to deal with. Sooner or later at least. Devaluation of the concept of consoles. A dedicated gaming platform has already been competing with dozens of other ways to play. From iPads to browsers; games can be played on just about anything shy of cooking utensils.
With regularity this tech is being improved. The very concept of consoles will have to change. They can't compete with PC's. Not in the strictest sense. They are way too small to compete directly.
They have a distinct advantage (errr... they did) of being solely dedicated to the act of play. This has always allowed consoles to excel in particular ways, while coming up short in others. Having a single set of hardware to dev for is a huge advantage. It allows those options to be explored at its fullest... but more and more I'm not seeing that as being necessary in this industry. Budgets have inflated to such a drastic extent within this single generation that specialization in specific hardware is becoming less necessary than a focus on portability.
The industry is changing before us rapidly. Consoles being static targets at one time allowed them to be exploited to degrees never thought possible, but the industry on the whole is going in an entirely different direction.
I have no answer. I just enjoy playing them as I've known them, and in my spare time making models and dreaming of a game that might never be.