Look, it's very simple.
Nintendo didn't expect the DS to become the juggernaut that it is.
They came out a few months before details arrived about the system - with its kooky double screens and touch controls - and said, quite specifically, that "we're working on something new, and we'll be surprised if it captures 10% of the market."
They knew it was a huge departure from what they were doing, and they approached it somewhat cautiously. Then Nintendogs and Brain Age came out, stormed the crap out of Japan, and has lead to the DS becoming unstoppable. There is no reason for Nintendo to compete with itself, especially when it is ultimately going to attack something that is proving to be so lucrative.
Now they can make something for the DS and sells sytems, or they can make a GBA game and still cater to both crowds. It's really win-win for them - they can't hurt themselves either way.
However, they are going to ramp up DS game development as time goes on. We've already seen this. Which is why the Game Boy, in technical terms, is somewhat gone. However, to those who have said the GBA lives on through the DS, that's completely correct.
What's going to happen is that Nintendo will probably make the DS2, and it will be backwards compatible with both GBA and DS games, and have some new gameplay twist to make it the DS2. Like maybe it has tilt technology built in or something, I have no idea.
I don't think the Game Boy, as an industry icon, will ever die. It'll just be reborn in different costumes.
That's what happens when you create a Frankenstein. You forget about the zombie.
I like pirates m'self.