“Can anyone explain to me how having one console would be bad for gamers? Or game developers for that matter?,”
I think the hidden meaning is that last sentence. Gamers want competition, it's what keeps things interesting. Developers just want to get lazy. Sure we can just call it the P-Wii 360, that sounds catchy. The next thing they'll want is a standardized spoken language so they don't have to make multi-language support. . .
I remember when I saw "Demolition Man" and the winner of the restaurant wars was Taco Bell. My first thought was "oh, I hope not!"