The argument that a lot of people are making (or fearful thoughts they are entertaining) goes something like this:
1. Wii is casual.
2. Wii is outselling both the PS3 and 360.
3. Carnival Games sold a million!
4. Developers...
a. Stop making the hardcore
b. Start making mini-games.
c. Profit
5. Hardcore gamers screwed by the casual success.
6. End of gaming.
Not the tightest argument but that's the gist of it. I appreciate the long OP, read it all, nice to read something coherent. Sorry my response is not directed squarely at your post but if I tried to pick it apart it would be mostly quibbling. Thanks.