The PS3 was $599 at launch. The PS2 was $399 if I remember right. So the launch prices aren't much different this generation than any previous one. There will be price drops as soon as demand gets lower than supply, possibly this year.
I think the downfall of consoles is not eminent. It will probably go at least one more generation.
Mobile games move a lot of copies, but don't make much money. Rovio, the makers of Angry Birds, is about a $150 million a year company. Nintendo is about a $9 billion a year company. Sony and Microsoft are hard to measure because they make way more than games. But there is no mobile game ever released that has made enough money to support AAA development budgets.
That could change someday, but as long as people expect to pay $1 per game (or free with advertising), mobile won't be the platform for AAA games.
At CES Nvidia announced the Tegra K1. While this mobile phone chip is as fast as a 360 or PS3, most significantly, it's the same architecture as the GForce cards. So it runs everything the 780 runs, just slower. It has 192 CUDA cores, runs the latest unreal engine (something the 360 and ps3 can't), is 64 bit, and will be out this year.
This is a huge advancement in mobile gaming. For the first time, AAA developers can scale the exact same game to a mobile platform.
If this is out this year, imagine where we will be at in 7 years. With the speed mobile hardware is going, and the fact that the console market is being squeezed by both directions (Steam Machines coming down from PC gaming, and Mobile hardware coming up from handheld gaming), I really do think consoles as we know them, has reached the last generation.
We will find out in 7 years.