Nintendo as a Franchise does this on a nearly yearly basis. No they wouldn't lose money as the fans would go out and buy the new consoles to play the new games. Gamefreak being a part of Nintendo could have made Gen 5 on the 3DS while it was still new as all the Mario games did an immediate switch to the 3DS as well as other big name titles and people went out to buy 3DS' for those titles. Pokemon isn't an exception to this.
We have the Wii U out now so almost all Wii game production has halted. Almost all the games coming out will be for the Wii U and the 3DS has started a full switch. Production of DS games is either over or slowing to a standstill and production of the handhelds and the original Wiis have pretty much stopped.
That's how Nintendo as a company has done business since its inception.
Gamefreak, since they did not want to move to the larger consoles at the time of B/W's conception continued to make games for the DS. B2W2 were rushed because there was a deadline to make DS games that they wanted to meet.
Nintendo will continue to make newer consoles as time passes and every time there will be a forced switch over either right after creation (home consoles) or a few years down the line (Handhelds). Development companies have to produce for the next big thing or rush their work to get it out on the latest console before it bellies up.
No actually Gamefreak does not want to move out of sprites. They've actually made these comments many times. Junichi Matsuda and Mr. Unno were questioned about making "3D" Pokemon images for Home Consoles, and the answer to both was "We don't want to." They admit it would be nice, but it took away from the meaning of the games and the core reason for them. The current directors do not want to use 3D renders in place of sprites and prefer using sprites. They also do not like the idea of making a home console game as the Pokemon games are meant to be taken with you as you travel hence the name Pocket Monsters.
Will we get either of these? They said sometime in the distant future, yes, maybe. Do they want to do this? NOPE!