The reason for that gap in logic is the assumption that the console market is a zero sum business.
While there is unquestionable overlap, particularly with the PS3/360, the ultimate goal of any platform is to produce enough success to stay in the game for the next generation. Being first simply guarantees pole position in the next round.
When sold at an initial loss, the assumption is that early lost revues will be recovered through license fees from software in the future, which becomes more feasible the more titles being produced (profitable or not; doesn't matter to the platform manufacturer, so long as they receive their license fee).
So long as license fees continue to keep MS profitable, the Xbox is still in good standing. There is no danger of "losing" all its major licenses to the Wii, so long as the PS3 and PC guarantee a market for hardware intensive softs that are diluted at best on the Wii.
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