Doesn't it make more sense to view Nintendo's current dominance as the exception and not the rule? It is, after all, built not at all on the traditional Nintendo formula: storybook adventure games that hide deep mechanics beneath their cheerful façades. Rather, the Wii has sold on the back of low-quality sports sims.
Nintendo has found a profitable niche. But it's nothing at all like the niche they've had for themselves in the past.