But you're assuming that demand for the DS and Wii is in a vacuum. You're assuming that there's nothing out there other than the DS that can satiate that demand. That's simply not try. People who own PSP's need a reason to buy a DS. People with iPhones need a reason to buy a DS. While the DS is selling quickly, and dominating the market, it isn't the only device there, and it's not something everyone that uses a handheld device to play games owns. The reason for Nintendo to lower the price is to attract those who have passed on the DS for a conglomerate media device to take a second look. It's to hook people on Nintendo's platforms, and to get them to enjoy Nintendo's ideas.
While the DS is bringing in what must be a pretty penny (what, it's been 2 years since the lite came out, and there hasn't been a single drop in that time, IIRC.), Nintendo could take a cut and greatly boost sales to make up for it, then, the increased volume in game sales that would likely come with it could exceed current earnings, market share percentage would rise, development for the Nintendo platform would rise in reaction, and in return, Nintendo would earn even more money, market share, and brand familiarity than it has now.
I've got two real concerns about this type of DS remake: The first is that although the DS is a great system and a great handheld, can Nintendo be confident that they can make a great multimedia device? It's a relative first for Nintendo, since they've never created a console with the ability to play any media other than their proprietary software. (I'm not counting that device for the GBA and DS that was moderately successful in Japan: It was an add-on, and not an device with the initial function.) I'm also concerned that there are smaller, better, easier, and more reliable devices out there that do everything this DS can reportedly do, exempting playing DS titles, and if someone desires this sort of device, odds are that they already own it. With all the MP3-playing camera phones out there, I can't see anyone with the intention of buying a DS choosing this model over the light, since they'd likely have a phone that could do the same thing.
I'm being a downer, I know, but I'm skeptical for little reason, since I'm not all too familiar with the actual buying habits of Japan, since I don't know how, when, or where the system will be released, and I'm not psychic. I'm merely attempting to point out what I'm worried about in regards to the device, not that the device, itself, is flawed.