Until they can somehow make it much easier for PC to connect to TV, or make a handheld that looks good on a TV, set top consoles will not die out.
Sure Ipod and iPad games are growing popular, but that's because people enjoy playing games on the go.
When an iPad is capable of delivering a console quality experience on a big screen, THEN consoles will die.
With Apple nearing their 3rd iPad in less than 3 years, and without these abilities, it looks like their consumers will most likely be spending several more thousands before it happens.
In which time, they could have just bought a console. For every iPad that is released without these capabilities, iPad is "branded" as being a to-go service, and not a home entertainment one.