I will agree that the price is a bit high for Nintendo.
I actually kind of see this dropping in price by midsummer by 10-20 bucks. I think people are going to shun it in light of the poor economy, sending them to the DS, which is going to screw up Nintendo's plans, which I speculate to be moving the DSi as an intermittent successor until a full fledged DS2 appears.
I base this on the introduction of DSiware, which I think Nintendo is going to start pushing really hard as an answer to the iPhone App store. Yes, I do not think the iPhone is that legitimate of a gaming device with the lack of physical buttons, but the sure are advertising it as a gaming platform a LOT lately, and the fact that a "can the iPhone beat the DS?" article pops up frequently (every two weeks at the longest) makes me think Nintendo is really starting to consider it the new contender (perhaps even more than the PSP, at least in America).
That's all my guess though. Just seems a little weird that (like botticus mentioned) that this is showing up this quickly - I was pegging it for Septmeber at the EARLIEST this year, given the steamrolling the DS is doing 'round these parts. I think Nintendo is spurred on also by the somewhat early success of the DSi in Japan, which I think is a poor thing to base it on - Japanese luvs them some gadgets, which I think is propelling the sales there more than anything else, and are about due for a drop in moved units.
Interesting year we've got building up so far.
Regarding the iPhone:
Consider that the DS is similar to the Wii in that a lot of people who never gave a shite about video games have been drawn to it by it's relatively low price compared to other platforms and games like Brain Age, etc which are both easy and fun. Of course, the DS caters infinitely more to all types of gamers compared to the Wii, but that's a different discussion.
Since they have a substantial number of DS owners who are much more casual players that aren't interested in 40+hour RPGs, it makes sense that they might be afraid of losing some casual market share to a do-it-all device, especially one that gets so much attention. Why get an iPhone and
a DS when you can have everything on one device and more (phone, GPS, iTunes which people love for some reason, etc).
Keep in mind, more casual gamers will probably care less about which games are available, they just want to play fun games. So if owning an iPhone means no Brain Age/Cooking Mama/etc, that's ok, because there's already 50 clones on every platform now (Brain IQ Challenge! Brain Buzz! Brain Busters Buzz Challenge IQ!) and people buy imitation titles all the time without knowing or caring.
Digital distribution also seems the way to go for smaller or less involved titles. Looking at the success of PSN/XBL/Wiiware & VC is proof enough of that, and that is
something that the DS is lacking. Heck, even the PSP was able to integrate it years after release, whereas the DS wasn't made future-proof at all. So more than anything, Nintendo probably sees the potential, interest, and demand for the DS to go the same route, but aren't ready to launch a whole new system. In that regard, I think they'd be better off waiting and just putting all of this into the DS2, with complete backwards compatibility. Then people wouldn't be confused, because it would be an entirely new product, and the price would be more justified.
I don't care about any of the new features they've added, I think removing the GBA slot is a mistake, and I know more than a few CAGs feel the same way. So, it would take some killer apps on the download store for me to even consider upgrading, and let's face it, Nintendo's never been all that good with the must-have titles within the 1st year a system's been out, at least in the past decade.