You're pretty bang on here. Apple did blunder into video games, though they were clever enough to realize what they'd stumbled upon and adapt strategy to take advantage.
Not sure how hard mobile gaming will hit the established gaming market, but I think at the minimum it will cut off its growth. Dedicated handheld consoles will probably contract severely, especially if they insist on pricing them higher than an iPod Touch, but I still think there will still be a place for specialized gaming hardware in the living room.
But I have to answer your concerns with a question: If people are having fun with $0.99 games, and developers of said games are making money, what's so terrible? You dismiss Angry Birds as shallow, but it actually has more depth than the game that launched mobile gaming back in the '80s: Tetris. All iOS is doing is leveling the playing field between indie developers who could never get retail distribution and mega-publishers who can.
If there's demand for more sophisticated games on mobile devices, then sophisticated games will get made. If you want a kickass WRPG for your iPad, check out Avadon: The Black Fortress.
"The worst part about these reviews is they are [subjective]--and their scores often depend on how drunk you got the media at a Street Fighter event." — Mona Hamilton, Capcom Senior VP of Marketing
*Image indefinitely borrowed from BrainBoxLtd without his consent.
