Late to the party - I agree that there's any number of reasons Nintendo going third-party for consoles would be bad for them and for us.
In the most "practical" sense, Nintendo really is the last true gaming company in hardware. They do provide perspective and balance to the other multimedia giants currently leading the industry ("leading" purely in terms of user base and sales, at least). For all that it's the cool thing now to say Nintendo is teh kiddie (OMG, Halo voice actresses can't all be wrong!), there still are people who grok Nintendo. People have bemoaned for YEARS the "monopoly" that Nintendo has in the handheld market. They've groaned that we have "suffered" sub-par Gameboy hardware only because there's no real competition. And yet so many people see nothing wrong at all with Nintendo getting out of the console business and allowing a couple or even ONE company to lead in all things hardware. WTF indeed.
However, it's also a matter of things slightly harder to pin down. Nintendo HAS always tailored their hardware to their software and vis-versa. Some people may not like say, the N64 controller, or the Gamecube controller, and some can't understand any possible reason why they have "non-standard" ideas and control layouts. ("OMFG, one stick is small and the other big, WHAT WERE THEY THINKING NOOOO I CAN'T HAVE HALO GAMEPLAY IN METROID OMGBBQWTF GACK STRANGLE".) And it's true that Nintendo doing things in their own quirky way can sometimes cause problems as far as so-called industry stanards go. But flip it around and from the other perspective, lots of the little custom things Nintendo does make a different kind of sense. The GC pad, IMHO, is uniquely designed for 3D games. The "strange" button layout, with that big green center button that so many seem to think is "toylike", promotes for some games, an efficient control scheme. A "primary" button, immediate secondary (the B button), two "option" buttons (Y and X). By contrast, I can say in all honesty that the downside of the "generic" button layout and scheme on PS and Xbox pads, well, feels super generic. It's simply less intuitive and also, again IMHO, encourages developers to be inefficient and toss whatever functions wherever... the buttons are all the same, after all.
One could point out that Sony, for controller design, has never really had to stop and "think" much about how gaming interfaces even should or could work. They just copied the SNES pad and added a pair of extra shoulder buttons. When it came time for analog, they shoe-horned the sticks in the middle. This isn't calling the Dual Shock pad crap. For an all-purpose Wonder Pad, I think it's quite servicable. And this isn't focusing on "Oh no, Sony just stole everything". Rather, the point is that: Nintendo has still actually THOUGHT a lot more about some things than anybody else in the game right now. You could say for them, the basic gamepad which is STILL the model for everybody else is old news, 1990 - 14 years old! In that timeframe, other people have done all of shoving a pair of analog sticks onto the same design. Nintendo has gone through two other different sets of pad ideas.
There's other details as well. Sure, Nintendo made a mistake in one way with say, sticking with cartridges for the N64. I still think some of their reasons were very valid; they had a POINT, a point most people were not willing to conceed to them. Aside from anti-piracy, the Gamecube mini-DVD format was also thoughtful. I have still consistently found Gamecube software more accessible and a more well-presented experience due to things like super fast (in most cases) or non-existent load times. What about the DS? You know what? I think the PSP having optical media on a handheld is fantastic. I applaud the advantages of it. And I'm still glad the DS uses (better than GBA) solid state media. For what the hardware is, what it can do, the media choice is perfect. The DS isn't the system for mimicking current game consoles with all the audio-visual bells and whistles.
I suppose in the end, all I can say is this. Thinking about the PS3 and Xbox 2/Next/Xenonononzubaboba, all I'm curious about is how nice the graphics will be, and what kind of nicer game engines will be possible with stuff like them fancy newjack physics engines. I don't expect anything else about the systems to raise eyebrows or interest... I'm sure they'll be nice, acceptable, mainstream palatably "cool" and "standard".
Thinking about the N5/Revolution/Whatever, I'm curious about how nice its graphics will be and what kind of nicer game engines will be possible. But I'm also intensely curious about what kind of overall hardware package it will have, what kind of interesting quirks, and what kind of controller it'll have. In short, Nintendo
is still capable of surprising me and engaging me in ways other than pure geek hardware power dicksize whorism. And I think one big reason why they have that ability, is because they're a "real" game company. They're still thinking about gaming first, where everybody else is thinking about consumer electronics that happen to play games too.
I'm sure that being able to appreciate Nintendo's strong points will make me a bastard Nintendo fanboy or something

Oh um, I like Gran Turismo as well. Yeah, that's the ticket!