I would be far more excited to be honest. For me, Nintendo systems have simply become a platform to play Nintendo only games and they've been that way since the N64 generation. Why wouldn't you want a company like Nintendo to develop exclusively software on far superior hardware platform? The closer and closer we creep to consoles being full blown PCs this would allow them to focus more on peripherals and general game experience enhancements to support their software.
With that being said, I think Nintendo gets a bad rap when it comes to hardware. I firmly believe Nintendo makes the best hardware (in the categories of quality and reliability). I've never had a Nintendo system die on me. I can't say the same for Playstation or Microsoft or Sega.
As for the future? The money really isn't in the hardware business as far as I'm concerned. Look at Sony and MS this generation. I think the Wii success was always somewhat of a fluke and the exception not the norm and that in general we will see the larger more powerful consoles seeing larger amounts of sales.
Why not let the larger companies endure the selling at a loss and benefit 100% from the software sales.