Well, that certainly makes the new hardware much more plausible. I hadn't thought of it this way, though I see slight conflicts with the rumors, as they said the controller screen was in HD.
If Microsoft and Sony choose to focus on input rather than power in the next generation, then Nintendo are certainly playing it smart right now. But with both Epic and Crytek courting for more powerful hardware, I think we may see a notable gap in performance still. Nothing compared to this gen, but still greater than PS2 -> Xbox for example.
I'm still wondering if Nintendo are leaving casuals behind a bit with this tech, as I imagined this controller being more of a Wiimote inspired device.
E3 will certainly be exciting. 
Also, I just won a great giftcard for a gameshop! My day is awesome! 
