Are Consoles ruining the gaming industry?

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First, that PC vs PS3 arguing is pretty pointless. I give you few facts so you can carry on.
Cell in PS3 is gimped down and uncapable of using it's full potential in games.
BD drives exist also on PC and soon they will able to handle the full 200GB discs, unlike PS3:s drive.
PC games aren't limited to the current high-end performance.
When devs can really harness the PS3 potential, PC specs are so far away that there's nothing to discuss anymore.

@Topic: Although i have hard time to follow the logic in this thread, the title seems to be a little misleading.
But what i understood about what OP said, you're barking the wrong tree. It's not because of consoles, it's because of constantly rising development costs. You need to make games that appeal to larger group than the PC hardcore. In order to appeal larger group, you need to make games that are simple enough to pick up and play even for someone who haven't learn to play complex games.
When you compared games ten years ago, the games required smaller budget that what they require today, i give you an example: You can make a lot more complex game for the Wii than you can make for 360 or PS3 with similar budget. And as we all know, only the games budget is the limit. Ten years ago, with smaller system requirements, the budget was small enough to justify game development for the target audience.
And not to forget, when you are targeting the PC hardcore, you develope for people who complain the game not pushing enough hardware, and when it does, they complain their hardware can't run the game and don't buy it.

The PC gamers are the ones where you find the most casuals, the biggest challenge is to get the people to pay for their games. That group plays the solitaire that came along with their OS, they play the free flash games found on internet and the reason why they play these games, is because they already have their computer, when those games don't cause any extra costs. So, there's a huge potential in PC gamers but making complex games isn't going to help you to penetrate to that market.

What it comes to videogame industry crash, the current situation is different (although there were signs of similar situation coming), unless the talk was about PC gaming.
If we look at the reasons why the crash happened, was because the market saturated with games that no one wanted to buy. The risk i see this happening with PC:s, is because the publishers may invest to games that are too complex to casuals and too generic for the hardcore because of trying to play safe due dev costs and no one controlling the market. Also the never ending sequels with nothing new and little to no innovation to expand audience (i wouldn't call pushing hardware or adding a "cool" gun innovation or new).

What i think fkusumot is trying to say, that before PSP, any handheld didn't offer the same latest games that are available on your home console.
Besides PSP, you could get the same games that were released on the last generations consoles, but not the games on the current gen.

If my post was without sense, it's because i tried to reply to something i thought was somekind of point in this thread.