I voted that it depends, but for the most part I don't mind the $40 price, though I think that's as high as it should go. It's $20 cheaper than PS3 games, and while you could argue that maybe they should be half price (so $30), it's not a huge deal to me.
Really though, for handhelds, I think that for the price of the game you should get the added benefit of being allowed a single downloadable version tied to your system. Since the point of a handheld is that it's portable and can go anywhere, you should be able to better carry around your collection, or at least a decent part of it, without having to bring around all the discs/carts.
If I could purchase downloadable versions of games for like half price of the MSRP and they had some way of not screwing you if you get a new system instead of the crap MS has, I'd only buy the downloadable versions.