You guys are both wrong :) The real tragedy isn't price or setups, it's the seemingly unwillingness of the development community to push a boundary with a game.
Developers have really boned the consumer this generation with all of the half-baked sequels and ports more so than ever before. I know the way the economics work out it's crazy not to port and sequel, but the lack of creativity in what was once the most fertile environment for media (IMO) is shocking. They seem more interested in looking back and spit shining really recent stuff instead of making the future.
Where's the new IP? The new ideas? Ninja Gaiden with a girl is still Ninja Gaiden. And don't even get me started on the Wii's Godfather or Lego Star Wars compilations. Adding a waggle here and there doesn't justify what is essentially a $50 game "do-over"
The thrill of playing gamrd for many (myself included) is the variety of such. I've been a surgeon, a pilot, a cop, or whatever on my DS. On 360, I've shot stuff, hit stuff, played sports and shot more stuff.
I have hope for Assasin's creed and even some of the distant PS3 stuff, but so far in my opinion you've got a new Zelda, Gears of War, and Motorsport standing out for an ENTIRE wave of next gen systems and games across three huge companies and thousands of development houses. And the next big game to drop is either Space Marine 3 or Carjacker 4. How many NES games were mined to the 3rd or 4th iteration? SNES? PSX? There's a reason for that.
I remember debating very hard on whether or not to get a Genesis or SNES, a PSX or a Saturn, and then again a Dreamcast or a PS2. This time around, there isn't even one system that makes stop and think "I need this now!"