Wow, lots of excellent commentary here. Doesn't leave much to add too.
For me, I don't think HD adds anything in the minds of Japanese. Japanese love their anime. LOVE it. What does HD do to enhance that? Nothing really, in fact from a Japanese prespective, it may detract from it because the characters all start looking too real - too Americanized. Only NA seemed obsessed with realism in games. Personally I don't understand why. I play games to distract from the real world. I don't want cartoons to be totally realistic - they'd hardly be cartoons at all. Nor do I want games, especially violent ones like GTA, too realistic either.
Price and size of the HD consoles sure don't help either, nor the lack in innovation they bring to gameplay.
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