I think the smartphones are killing the handhelds. You already have this device in your pocket that is already far more powerful than handhelds. So do you justify buying a separate device just for buttons? Lets not forget, smartphone games are far cheaper than handhelds.
Also, this device does a lot more than gaming.
If that was the case then why did the 3DS sell so well? How did Pokemon games sell so many games, considering how expensive those games are compared to mobile games?
I like my iPhone but they are pretty bad at almost everything they do. No iPhone game has had me hooked as the 3DS games I mentioned earlier, my Tom Tom is a better GPS, my Canon 60D is a better camera. It seems that with these "all in one devices" to group phones and tablets together, you're doing a lot of compromising. But if you're happy with that then it's fine! Just remember that literally millions of people want a better experience.
Actually the iPhone is pretty good for music and web browsing (if the tabs don't reload).
(but no you don't solely justify buying a console because of buttons. For me its;
- Buttons
- Long standing game series
- Permanent compatibility, as in, no FW update will break a game
- Replaceable batteries to futureproof them, remember these are machines that last for 5-10 years with no planned-obsolesce
- HW features not present in iPhones, like Streetpass, 3D displays, OLED displays)
((My ultimate problem with gaming where your fingers obscure the image, is that you wouldn't be happy with this
))