@68soul: If Nintendo released hardware on par with the HD consoles, they wouldn't have made nearly as much money. Looking at the financial reports of Microsoft / Sony, it's clear that selling hardware at a loss isn't the way to go.
They would like to have the console for everyone, or as you say be the "real" market leader, but only as long as they profit from it. As it is now, Nintendo has likely already made more money with the Wii than the PS2 has in its entire lifetime.
Anyway, I wouldn't worry about next gen. Nintendo has made its presence known, and they will not be underestimated by third parties next gen, so the games will come. I can't imagine the next Nintendo console being weaker than current HD consoles, nor do I think that power could be considered not "good enough," even a few years from now. I mean, how great does a game need to look, really?
