However, that doesn't change the fact that the majority of the games will be played on console-TVs/computers.
I agree with most of your post, but this line stuck out. The Game Boy has a larger market share than you think. Its AAA games consistently hit the top ten sales lists, and it's been so successful over the past 15 years that Nintendo, in the face of the Virtual Boy flop, the N64's second-place market share, and the GameCube's stunting in the PS2's shadow, has no debt and a cash storage of about $4 billion. They've never been in the red for as long as they've been a publically traded company, and the recent exchange rates have only increased their earnings (there was a link here a couple of days ago about that.)
My prediction is that next-gen console development will become easier, thanks to off-the shelf components, like pre-fabbed engines, standardized APIs (I cite OpenGL on PS3 and DirectX on XBox2 again), licensed physics engines, etc. However, development time itself will be slightly longer--maybe a couple of months. Without OGL/DX/etc, we could be talking another year of development. But if it's easier to get to the shiny new features, and easier to implement them, then you're looking at drastically reduced dev time.
I'm sure the publishers would love to bump game prices up regardless, but then the ones who do will be out-maneuvered by the ones who'll say, "Hey, we keep the gamer in mind. We're not raising prices."