I thought the DS being underpowered was a flat out bad idea. I thought Nintendo had always had pretty strong hardware (this was before the Wii was unveiled) for both their console and handheld realms (although less so handheld wise because they were rarely challenged), and making their next one so underpowered was going to hurt them- specifically in contrast to what Sony was offering. Maybe it was because of my North American mentality, but I just didn't see this bulky, foreign (non gameboy) device being a pillar, let alone a good idea.
But I, and a whole lot of people were wrong. And oddly enough, the DS performing so, so well has actually taken a lot of sting people would have felt when the Wii's power was revealed, off. Instead of seeing a system with shitty graphics, I think a ton of people are looking at that console as fitting the same category as the DS- something that may not be beefed up technically, but something that will be really easy to get into, something new that I've never played before, and just flat out something different.
If you look at any videogame magazine- cover or inside- or browse videogame sites or even watch videogame shows, graphics are always, always at the forefront of discussion, be it for reviews, previews, or unveilings. Army of Two gets unveiled? Holy shit look at those graphics. Hey, is it co op?
People don't ask if it's co op first off, they don't ask how it controls, what the camera's like... the first thing they're exposed and expose them self to are the graphics, and it's pretty amazing that (thus far) Nintendo has succeeded in deflecting the weakest point of both their current handheld and upcoming console so well. We're getting at the point where people are looking at games like Mario Galaxy, Madden 2007, and Rayman, and are complementing (aspects) of their graphics. Nintendo's already lowered the bar if you will with the mindsets of a whole lot of gamers when it comes to their machines' graphical capabilities, and they've got a lot of them to accept it already. I wholey believe that the heightened pace at which they were able to achieve this is in part thanks to the DS already forming this mindset before the Wii's graphical capabilities were even revealed.
They've done an amazing job with a machine that I thought was a mistake. It'll be really interesting to see what they do with one I think's a good idea.