The reason I don't think this makes sense is because the expressed reason to drop the 3DS price was to build up a base so third parties would put games on it. Third parties are apparently happy with this move, consumers are reacting well to the new price, software sales are up.
So..you undermine all that by cutting short the base to make something that is essentially incompatible with the system released a year prior? Huh?
This is almost exactly like the rumors that Nintendo was going to release a DS revision that removes the second screen and relaunch it as the Gameboy Next, with PSP graphics, a Gamecube disc slot, and whatever else that was about. And I'm willing to bet people believed that, too.
Actually, yeah, as I recall correctly, it was called the Gameboy Evolution, right?
Here were Joystiq's hot tips about the new Gameboy, designed to replace the DS, in 2005.