I think you're misunderstanding my point. I don't expect Sony and MS to go Nintendo-style casual with their next machines but they will think harder about development and hardware costs before attempting to release an uber-machine that costs them $200 more to make than what they can sell it for.
That will result in less powerful machines that cost less to develop for, not necessarily another system full of party/casual games.
I think you are on the right path, but I don't think less powerful is necessarily the only direction. In addition to not focusing entirely on Raw Horsepower, I think the next generation will focus heavily on standardized tools, development kits, engines, etc. being developed and supported by the manufacturer to help cut the time and cost of development. That means hardware will be designed to be high performance, of course, but high performance coupled with straightforward, easy development. Does that mean the hardware won't be bleeding edge? Yep, but it doesn't mean it still can't be very, very powerful.
I already refuse to pay 60 bucks on next gen games. I haven't bought a single game at full price yet and I won't. I'll buy it used, discounted, ebay, etc., or wait until the price comes down as that is just too much IMO. The Wii titles are at the top of what I'm willing to spend and even then I'm very careful in what I get.
The next generation is going to be pushing the envelope in terms of budgets as we'll see hollywood sized spending given the level of hardware we will see if the next xbox installment and/or playstation installment is another hardware leap up. I'm NOT paying 70 or 80 bucks for a game.