I've always considered "console quality" a reference to the compromises necessary with a handheld. When you make a handheld console you are restricted by a lot of aspects. You need to fit everything from the screen to the controls into a small device, which has always resulted in a product with worse graphics and controls than a home console.
A good example is Killzone: Mercenary, which both does and doesn't fit the term. Graphics wise it's certainly deserving of the title "console quality", because it really does look as good as many PS3/360 games. On the other hand it's controls are unable to match those of it's home console equivalents, thus can be considered to have "handheld quality" controls.
To put it in simple terms, a PS3 could do almost anything a 3DS can (except the touch controls obviously), but the 3DS wouldn't be able to mimic a lot of what modern PS3 games do. Imagine TLOU on the 3DS :P it would be rather different that's for sure.
Don't think of it as an expression of quality, but of what each can normally accomplish.
