It's possible, the level of technology is getting to the point where the diminishing returns for having powerful consoles will be enough that just simply making a lower-powered handheld will yield close enough visual results.
However, there are still games that just will not be practical on a handheld. Any kind of motion or peripheral game like Just Dance, Guitar Hero, Wii Fit, House of the Dead, etc... In order to satisfy this, there will still need to be some sort of box hub at the TV where peripherals and additional controllers can hook up.
The bigger problem would be that gaming console controllers are typically bulkier and larger than handhelds. The standard PSX controller won't fit comfortably in your pocket, and the Wii U gamepad certainly wouldn't.
Fairly cool idea though. It will be interesting to see where Nintendo takes things next generation. I am guessing it is an almost certainty that the handheld platforms will be further integrated into the console experience. Although I think this will probably happen this generation, rather than next.
I describe myself as a little dose of toxic masculinity.
