Well I think the reason why Nintendo sells stuff lower is because they can. I mean I'm sure a lot of us disliked it when the GC didn't have a DVD player. But if it did like the PS2 and the X-Box then the price would have been a lot higher (DVD players don't cost as much now days, so I guess that's why they are going to put one in the Rev).The PS2 Played DVDs, CDs, DVD-Roms and so on. I'm sure the X-Box could do the same. By doing so they had to make their price go up to pay for all them things added on to it. Nintendo sticks with what a game system should be, a game system. They don't add tons of things to them (DS doesn't have an MP3, MP4 player, it doesn't play movies and so on like the PSP. Thus keeping their price low and keeping the price to something a 12 or 13 year old could buy). I'm sure we all like the nice add-ons to the systems, but it's going to cost more for all that. Buy a Dell computer and have add-ons and you're going to pay more for it.
If they stick with the way they are going now and go on the same with the Rev and GBE then they are going to make money. Like you said, the power isn't as good as the PS3 and the 360 (well we think it isn't, Nintendo hasn't spit out much specs on the Rev. So for all we know it might blow the PS3 and 360 away, but I don't think that will be happening. The PS3 is a no way, but the 360 well read back on some of my post in here about the next LoZ game on the GC and the 360 and you'll see wha tI'm talking about). But if the games are good then it will make up for the graphics or whatever. Ask Final Fantasy Fans what the best FF game is, and you will most likely hear 90-95% of them say Final Fantay VII (7 is the king of all Final Fantay games, it's Square's FF pride and joy). But the graphics are bad (you hear all these people dis the DS graphics, well FFVII doesn't really stand up too well to the DS' graphics), but the game play is great. That's what matters, if the Rev games are great the graphics doesn't have to be right up there with KillZone on the PS3.