The original gameboy had a d-pad and three buttons, if you include Start. This could easily be done virtually. What's your point? In fact, playing an emulated gameboy/advance on ios works beautifully. Even if you played in Portrait, the total real estate of the screen is just about the same size as both the top and bottom DS screens. More than enough room to accommodate.
Its not an embellishment at all. There are so many stories of one guy in his basement, literally, making one game that took off. Look at OpenFeint. It started with Aurora Feint, a great, clever gyro-based puzzle game. It was tremendous fun, and the guy was an overnight success. Made millions. Then there was that british guy that made that train game. There are tons of success stories out there.
The point here is penetration. Sure, there are what, ~24 million 3DS' in the wild right now? Well there are over 835,000,000 iOS devices out there. I'm not even going to try to get into how many gajillion Android devices there are.
If even just ONE percent of those iOS device owners purchased a Nintendo game for $39.99, that would be $333,916,500.
By comparison, if even 10% of 3DS owners purchased a 39.99 game, that would only come out to $95,976,000
Based off of the numbers I have, the DS sold around 154 million units. Pokémon Black/White 2 are sitting around 6 million sold. At that rate, BW2 is only selling at about 4%.
With that math in mind, let's apply that to the 3DS. That's 960,000 copies of Pokemon Gen 6.
That's $38,390,400 at 39.99. Of course these numbers are going to be dramatically off. Gen 6 will sell millions for sure.
Let's say we sell 4% of our iOS device owners a Pokémon game. So about 1 in every 25 people. I think that's fair. If 4% of every iOS device sold a $39.99 Pokémon game, that would be $1,335,666,000. And that's JUST iOS.
Nintendo has tremendous brand strength. Applying those brands to a larger market would do nothing but good across the board, no matter how you cut it.