I don't see the problem here ...
The world economy is built around the concept that individuals will exchange more money to buy a product than it costs to manufacture; and the value of a product is (essentially) what people are willing to pay for an additional unit of this product from a manufacturer. Beyond a discussion on the viability of a product, the raw production costs are meaningless in the discussion of price it sells for. In everyday life we see countless examples of people gladly paying very high margins on products/services because they see greater value in the product/service than it costs a company to produce this product/service; and a classic example of this is beverages like coffee and soft-drinks where the production costs are almost negligible and the sale price can end up being substantial.
With that said, one (potential) benefit for a consumer of a company like Nintendo maintaining a decent margin on their hardware is that they are (potentially) less motivated to maintain high costs elsewhere. As an example of what I mean, Sony and Microsoft increased licencing costs substantially on software sold on the HD consoles while Nintendo actually lowered licencing fees when they released the Wii; and the net effect was that licencing fees were substantially lower on the Wii than the HD consoles. This benefitted the consumer directly because they saved $10 per game released, and has the potential to benefit the consumer indirectly if it ensures that developers can be more profitable (because it would translate into stronger support).
