Make a thread with a poll asking "does graphical horsepower matter to you?" I guarantee a lot of people will vote yes.

I don't know honestly if kids/teenagers will even take the 3DS successor seriously if it has a SD screen.

By 2016/17, even $99.99 cheapo/kids tablets will have HD displays as standard.

Nintendo's free to do what they want, but if they want to continue to see their handheld userbase decline, staying out of touch with the modern market and having a handheld that's far lower resolution than the standard phone/tablet is a good way to ensure they will lose even more customers next cycle.

They're eventually going to get to a point where they're selling all their hardware to 35+ year old Nintendo fans if they continue on the path they're on now who grew up in the "glory days" of the 90s.

It really depends on sizes of screen. To make certain resolutions worth it you need certain size screen for your eye to resolve. There is not much point making tiny screens with HD. 

It  does matter up to a point, there is a lot of talk about resolution but resolution isn't everthing as some examples prove a small pixel and smooth edges is one thing but if your textures are bland and unlifelike it doesn't look good, reflections are needed to be lifelike and each ray of light must be computated and represented and reflections and refractions multiple times. Soon we will reach a point where rendering real life world is possible and then where do you go? Manufacturers of graphic cards will have a great deal trying to sell then thus physics espects of GPUetc but then these will all emulate real life then there is no where to go. Although we may need to go quantum to represent ll the espects of a ray of light as both wave and particle to represent real life.

DIstance away from screen is another important factor as well. The most common estimate I've seen is that for a screen of about 5 inches, if you are a foot away, anything above 280-300 ppi will not be very noticeable for text, images, and movie playback (for games it should be even less.). So for a 5 inch screen that is about 720p. Now, I can see Nintendo making their screen bigger than that if they ditch the dual screen design. In my opinion, 540p would be the best price/performance for NIntendo if they stick with a 4-5 inch screen that they're using for the 3DS, currently. The Vita's screen still looks great with that resolution. 

I never like the folding dual screen design as the ribbon cable is prone to damage.

Yeah, I think Nintendo is going to change the design this round. The DS was interesting, and both DS and 3DS are my favorite closed platforms, but I think it was used to its fruitiion as a concept (dual screen.) 

Had the DS lite after problem with upper screen and ribbon cable and those are very difficult to replace especially with large hands. Then speakers have to be resoldered as  well. It is a difficult job. Got the 2Ds because didnt want a repeat of ribbon cable problems.

Not really, Nintendo is cheap and thanks to being the top dog of the portable market which makes them almost effectively top dog of Japan (not including cell phones) they really don't need to push their hardware that far ahead. It is unlikely Sony or anyone else will push out a comparable system so they do have to drop massive bells and whistles if it means they system they will release will be over the standard $150 to $250 price range their portables have gone for.

Once you get to that point, manpower and money will become the new graphics bottleneck. (It already is, actually)

My point was simply that modern consumers tend to place significant importance on graphics.