Sony brought more non-gamers in that way without costing the "hardcare" group.
Tell that to fans of the old, difficult Final Fantasy titles that they feel have been replaced by watered-down, easy to finish, full of stupid plot twists and cinematics travestys. Not that I agree, but those people are definitely more "hardcore" than what passes for "hardcore" nowadays (and which basically amounts to spending hours on forums trashing games instead of playing them, coupled with a generous helping of Nintendo bashing).
Also tell that to fans of 2D gaming in general, who felt very slighted by Sony's insistance that developers move toward 3D.
What nintendo is trying to do is make non-gamers into gamers when infact most will never be.
Yeah, I'm sure those millions of people who bought PS2s in cheap Buzz or Singstar bundles like an expensive and more versatile version of Trivial Pursuit are busy playing GoW2 and Okami right now. I've not seen the outcry by the current "Nintendo wants to destroy the industry" crowd back when Singstar was released and hyped by Sony, which furthers my belief that this is not about an actual threat to the industry, but about some good ol' fashioned system wars in disguise
Note that this goes both ways, Nintendo fans were definitely some of the most elitist and annoying forum pricks pre-DS, insisting that the GC lackluster sales were somehow proof of its "hardcoreness".
If non-gamers and gamers can play, and both buy, we will definitely see clones on top of clones since they are so easy to make. Developer get lazy and exhaust the industry with crap.
As opposed to doing what exactly in the current business model ? Last time I checked, the PS2 had some of the worst amount of shovelware developed for any console ever. I consider that a testimony to its success, not to the supposed laziness of developers (by which I suppose you mean publishers). There are already some deep, "hardcore" games available for the Wii, with more announced. Just because it uses the Wii and nunchuk instead of a joypad doesn't mean SSX Blur is an easy, casual-friendly game.
BTW, keyword here in your argument is "both" : if "both" groups buy and each presents a profitable market, then games will be made to adress both groups tastes.
I've presented in this thread the argument that this industry is already based on cheap crap, clones and sequels, Wii or not. I'm still waiting for a compelling refutation. I've also presented the argument that genres that became "niche" after a market expansion still managed to find titles developed and published provided that the niche remained profitable. I have yet to see evidence for sales of "non-games" or "casual games" being detrimental to the amount of "true games" (bleh) being sold. I'd argue that there is a good case to be made for the opposite theory (who here think New Super Mario Bros would have sold over 4 millions units in JP without Brain Training, Nintendogs and Animal Crossing ?).
If your analysis was true, which it's not, the market would already be flooded with cheapo Brain Training clones, not only on DS, but on every platform known to man. It's simply not the case. The BT craze started in Japan nearly 2 years ago, and those titles take a couple months to develop, so by your reasoning we shouldn't have seen any actual game being released in Japan after, say, October 2005 at most ?