There needs to be two systems out there much like there needs to be two mass retailers (Target and Wal-Mart).
Why?
1) Price Competition - When there are two companies the customer always wins because prices will be cheaper. If there was only one console leader then you can expect to pay higher prices if theres no alternative (legally of course).
2) More Games - Theres no guarantee that Nintendo, Microsoft or Sony would stay in the business if they left the console business. It would be nice to have every game on one system, but since that system would have every game out on the market whos to say some companies won't pull out? Over saturation could effect sales.
3) Variety - Goes along with More Games, but different consoles have different controls as well as online abilities (Example, Sony or MS vs Nintendo's online ideas. It's night and day right there.) and of course controls (Speaking of night and day, Wii Controls vs the standard 360 and PS3 controller.)
4) Oh yeah... Price. - Again, everyone thought $500 was expensive? Imagine if It's your only choice, and the price just went up to $600. This might drive more people to the PC market, but I bet a lot of people will swallow the bitter pill to keep with the consoles.
5) The Developers get screwed to - You know those things called royalties? Well one company charges less then another (honestly I don't have facts to who charges what, but I can assure you one company will pay for exclusivity or cut royalties for certain companies) well if theres only one clear cut console choice then It's obvious the fees are going to go up, and in return companies will not make as much profit and/or have to raise the game prices... again.
In conclusion: I think It's very healthy to have two consoles in the race, because we still have the PC market to go to when all else fails. I would not be dissapointed if one of the big three drop out, though I know some people will be.
It's just that simple.
