The 3DS will probably be roughly as powerful as the Gamecube or Wii, allowing Nintendo to re-release Gamecube and Wii games over the next decade maximizing the profit they received developing those games.
Nintendo’s next home console will probably be significantly better than the PS3 or XBox 360 on Nintendo’s next console. They’re going to have to licence new technology for their CPU and GPU, and do a significant amount of R&D to create their console anyways, regardless of whether they go for "PS3/XBox 360 graphics” or aim for more conventional performance; and being that (for the most part) taking advantage of the additional processing power will cost no more than making a current HD game they gain very little by limiting performance past a certain point.
