Generally, its a much better market to release on.
But ultimately, it comes down to budget. A downloadable titles' budget is generally a lot less expensive than a retail title. Since there is no publishing of discs (or cartridges), you're going to save yourself a bit of money in regards to the publishing arm. Additionally, since your title is digital, it has unlimited shelf space, so there's no desperate rush to the top for bigger & better graphics to help differentiate your title. If you look at the best-selling digital titles, they weren't graphics-busters by any stretch, but were made pretty cheaply with fun, innovative gameplay.
On the downside, the number of copies you can sell is far, far less. So you do have to adjust for that. Its a smaller risk/reward than cartridges, because even with huge success, you're not going to see a title like Drawn to Life on the Nintendo Channel.
And for what its worth, the 3DS market is growing. Dillon's Rolling Western sold somewhere around 25,000 copies its first month. Given the growth of the 3DS, it's about assured to eventually hit 100,000 or more due to its great review scores from users. With the publisher getting a 70% cut of revenues, that is a nice chunk of change for them.
Back from the dead, I'm afraid.
