Yes the battery live might still be a problem now but I don´t see it existing in the near future, I don´t see any of the other conflicts you mention as to be very big.
People want the same out of a handheld as they want out of a cellphone, in needs to be small, yet have a big enough screen, be easy to use (newer models are going into the touchscreen direction) and I don´t see the price beeing an issue. You are allready putting an expencive microchip in a cell phone, why not use that power for games ? A scanner and a printer need different hardware, a cellphone and a handhled both need a screen, a micochip and a battery, so you would not pay extra for the handheld or the cellphone. I think its more of a question when/if games with brand names get good mobile versions...
