I sort of feel like it is still a niche appeal sort of thing. It is pretty clear that I am a Sony man myself but I still have a lot of fun on my DSi and GBA compared to my PSP. The PSP has some really decent games and a few good ones off of the top of my head. However the content for the DS is still overwhelming and the titles they have include some of the 'best' games I've played. In the same respect it could also be said the with the sheer numbers the DS has it must be similar to bird shot with a shot gun. . . They are bound to hit a good one sooner or later.
The 3DS does have the upper hand of already existing on the consumer market though. Although cliche only time will tell, and although I am a Sony man myself. I don't count Nintendo's device out of the fight by any means. The fight will probably lean more toward the 3DS in the long run though because of the loyal army behind the console. Sony will have to make up the legroom with some solid content to cover the ground the 3DS already has on it.
-TwisT