Seeting aside that of course Donkey Kong originally appeared as an arcade game, on consoles DK appeared on the Colecovision first because Nintendo wasn't in the console business yet.

The arcade game Mario Bros was first ported to the 2600.

 MS hasn't just put Rare games on the DS.  They also put at least 1 of their Ensemble Studios games on DS, Age of Empires.  MS is currently working on at least 1 more DS game.

of COURSE!!!! what are u expecting? Would MS release Halo 3 for PS3??? NO!!! Would it sell better if it was released on both the 360 and PS3? YES But is Halo 3 still exclusive? YES

Nintendo won't just release their own games on other consoles. That's like releasing GT5 for Wii. Sure, it would sell more but u just don't do that for the sake of ur own HW sales

If all games were released on all systems, then they would all be the same but with different levels of power and price tags. The big 3 might aswell just team up and design one console together... which could either be really cool or a big flop.

These ideas seem to be an analogy of communism lol :P

 and game quality would plummet with no competition

You know, dsoverpsp, that scenario sounds familiar... When did something like that happen? Oh yeah, 1983. Coleco, Mattel, and Atari were all basically the same thing, as were their dozen other competitors. Any game you could find on 2600, you could also find on Colecovision or Intellivision (and could play the 2600 version on any of the 3 consoles). Developers had no real incentive to produce quality or differentiated titles. Plus, everybody and their grandma was getting into game development; even Quaker Oats had a games division made for releasing video games.

Know what else happened in 1983? The American video game crash, which sent the entire TV game system market into a 2-year slump. A slump that was only broken when a Japanese video game system which had liscensing requirements that prevented anybody from making the same mistakes of the early 1980s on this new system was released by Nintendo.

Forget the prospect of the Wii causing another video game crash; the 360 and PS3 are far stronger canidates for that with their massive shared library. But no worries, we almost definitely won't see a second crash of the market...