I know a few iPod Touch/iPhone developers and at the moment none of them seem too "Bullish" on the platform being profitable ...
Their biggest complaints at the moment are that you have to charge as little as possible to encourage sales, and rampant piracy limits sales. When you combine the two you end up with a platform where you have to develop your application/game at a budget which is tiny for shovelware. Its really only a matter of time before most developers (and more importantly their investors) realize that the iPhone market is not becomming as profitable as expected and the number of moderate budget projects falls to a very low level.
In contrast, both the Nintendo DS and Wii have viable business models for third party developers and (while they may lose some of the "Casual" market") this will result in them being able to maintain their place in the market for quite awhile.
