Ususally new tech is released or tested first, Japan will put this to the test. I would love them to use a system where you can use the serial number on your gba games to have downloadable versions of those games... but too many people would abuse that system.
As for old DS games versus new ones... the main difference in the interface is the dual touch screen, I see no reason why this would hinder game development for the DS as it should be similar to the PS2 -> PS3 transition.
Nintendo has a gaming device and now a gaming device with non-gaming functions. The difference is this is just an upgrade to the DS similar in value upgrades as GB is to GBC. Not many complained about GBC games no working on GB. >.>
The reason the media wants this to fail is because this is the original design of the DS, that statement is based on Reggie not saying 'new' when reffering to the business model for the DSi, the DSi was intended since DS day one. Because of this the dual screen and lifstyle software group will carry over. Which means, bad news again for the media guys in their eyes.
In short this thing will sell in the millions and probably create a new peak year for the DS models if it should hit the sweet spot like the DS.