It's entirely different markets. The "gamer" market segment generally isn't going to settle for iPod touch games. It's like saying Flash games will kill PC Gaming.
You know, I used to dismiss the iPhone/iPod touch as a gamer device, but I don't any more.
I think your argument is a little inaccurate. The "gamer" market segment may not settle for casual games, but there are plenty of deep gamer quality titles on iOS, they just don't get the same attention as the casual titles.
I think your argument is a little inaccurate. The "gamer" market segment may not settle for casual games, but there are plenty of deep gamer quality titles on iOS, they just don't get the same attention as the casual titles.