Sprite based games can be done on any system now. Its not like we have now have these powerful 3D game systems and they can't do Sprites anymore. That is silly.
Also, I think the 3DS is going to be a great 2D game system. Actually, it could be the best. You could have higher resolution sprites, than the system can display, and scale them because then it wouldn't get as pixelated. You can also show some nice depth with 3D. Think about the Tarzan animated movie. They used several layers of screens to create a rich and deep jungle. Imagine a Sprite based game doing something similar but adding actual 3D depth to the result. A truly beautiful and rich 2D experience can be had on the 3DS. Now, vector graphics may be a better solution, but it isn't the only solution.