It's very unlikely, even given your points, that the 360 will dominate unless Nintendo voluntarily cease trading the Wii. I doubt they're going to do that.
According to NPD Wii saw average weekly sales that were more than three times that of 360 (if I remember the ratios correctly it was something like 170,000 to 42,000) and of course Wii has been profitable from the start and can easily have a price cut as well.
In truth I think the games IP mean little other than steady growth for 360 - none are likely to drive big spikes and I think some will actually fail like NG2 as I think the 360 is starting to get over-saturated for games vs install base, particularly in the FPS/action genre.
Only a price cut could really see a big difference in terms of weekly console sales IMHO - but Nintendo can easily match it and even Sony, though I doubt they'd want to, could take a price cut if they saw it was needed to stay in the game in the US.
The 360 is in many ways a success - but I believe its built itself into a demographic 'corner' vs the Wii and the average weekly sales reflect this.
At the end of the day even if its cheaper than a Wii I doubt you'll see a majority of Wii purchasers switch to a 360 purchase instead. More people want a Wii period (that reads bad but what the hell!) and that's all there is to it.
Try to be reasonable... its easier than you think...
