Nintendo follows an Innovation / Perfection strategy:

for example:

NES was the innovator (D-pads, storys in games etc)
SNES was the pefection (amazing 2D gameplay, just an overall graphics improvement)
N64 was the innovator (3D gameplay, thumbsticks, rumble)
GCN was the perfection (overall graphics improvement)
Wii was the innovator (motion controls)
Wii 2 should be the perfecion if this is followed

I wouldn't be surprised if they got cocky and charged $399 for basically a Wii HD.

 But if you look at it that way the sales always dropped on the "perfected" console as opposed to the "innovative" console.

NES - 61 million -> NES - 49 million

N64 - 32 Million -> GC - 21 Million

The Wii 2 could sell less than the Wii.

That's like saying:

"but if you look at it that way an odd number always follows an even number"

Nintendo consoles just sold less over time because there was increased competition, in the NES days they had very little competition at all, only in Europe was there a decent competition and that's because Nintendo used to ignore Europe.

Both of you are really reading too much into your two theories... though I do believe Nintendo will stay on the same path they have drawn with the DS/Wii combo next gen.

It is very likely that they will adopt to the soon common HD resolution, but the next Nintendo console won't be much more powerful than the Wii, that's sure.
Probably two Wiis stuck together with duck tape... and with a gimmicky controller... and with casual games....

I mean, NOT! Stop believing that the future is the exaggerated version of the past, of course it will be different. We just don't know.

So why do people think that HD will have penetrated the majority of households by 2012?

LOL

You won't leave that point alone will you?

You might be right Nintendo usual want to bring the family together and what could bring people together faster than Ice Cream but I want to add a Pop Corn Maker too.