Earlier quoted context omitted.
Why are you comparing the DS to the iPhone when the elephant in the room is the iPod Touch? An 8GB iPod Touch is cheaper than the pricing of the 3DS. For completeness we're looking at $249 for a 3DS and $170 for a DSi [1]. What's more a typical new release 3DS game will sell for $30+. Compare that to the typically Honestly I've never played a DS so I really don't know but are the games really that much better to not…
It's entirely different markets. The "gamer" market segment generally isn't going to settle for iPod touch games. It's like saying Flash games will kill PC Gaming.
I think your argument is a little inaccurate. The "gamer" market segment may not settle for casual games, but there are plenty of deep gamer quality titles on iOS, they just don't get the same attention as the casual titles.