The increasing popularity of games may hurt games as an art.

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I came to this thread thinking it was one of Rols. Either we have a new challenger, or someone was serious.

Anyway, first i'd like to point out, that Nintendo seems to be the least of the problem of rehashing content by looking at what the other big publishers are putting out.

Wii was designed so that new content could be created, instead of rehashing content with the blockbuster businessmodel. And when you take a look, you may notice that Nintendo have put out lots of new content on Wii. Whether they are the games you like, is rather irrelevant, since it's new content anyway.
In fact, the whole success of Wii is based on the new content it brought.

For the art, if you look at history, every piece of art that is seen great, have been commercially successful. For example i myself largely dislike Picasso, but due to circumstances at his time, he was forced to have different businessmodel than the other artists, which made Picasso popular fast.

However, you seemed to present art as something else than it is, art, in itself, is the creative asset put into the product. And what's destroying the art in the games, is the rising cost of development, that effectively destroys the experimental creative aspect of the game, for the sake of high profit. Not the platform that offer you the best potential to make art.

Also, the art of videogames is very different from other forms of entertainment. For example, a movie you could call art, would be a slideshow of famous painting playing Sibelius on the background for two hours.