While I think he is right to a degree, I think he is probably more worried about being able to sell games like Brain Training and Nintendogs at full price than the Marios and Zeldas.
The problem is more publishers who put their console/handheld games on the app store for cheap as a quick cash in. Something like Lego Harry Potter that is selling for $5 on the app store, but $30-40 on handhelds and consoles. If people are eventually only willing to pay those budget prices, then you probably won't be getting the same level of games as before.
As for things like Angry Birds I don't really see a threat. Most of them are just rip-offs of flash games and those were free.







