Does the Wii prove that the HD razor/blade model is flawed?

[Procrastinato]

An interesting thread, Squill.

I have a few questions (for anyone):

(1) What would the current market look like, if all three major HW manufacturers had taken the Wii route/model from the last gen to this one?
(2) Is the Wii software situation a sustainable one for all market demographics?
(3) Is there a demographic vacuum the Wii doesn't cover well? How large is it? Will it grow as the industry matures, or shrink?
(4) If all manufacturers made Wii-like consoles (low-cost, profitable "razors"), what would happen if a new company entered the picture, and introduced a low-cost razor that used the "make money on blades" model, in the face of multiple-Wii-like competitors?