sheepdragon: If you want an Ouya, then go for it, but it's not much more than a neutered Android tablet without a screen, and with a HDMI output and included controller. It's cheap, though, I'll give it that.
C'mon now, that's a gross oversimplification. It offers many of the advantages of console gaming, and other useful things such as; support for multiple controllers on the same device, internet TV without having an internet TV (with the added bonus of being able to choose from a wide variety of Android browsers), cross device integration, and the immersion experience you get from sitting down and playing on a big screen instead of on your phone.
All that, and we won't even have to repurchase our games.
Another thing to consider is kids. While there are already many kids games on Google Play, most parents won't want to give young kids smartphones that cost hundreds of dollars to walk around with. Spending $100 on a games console is an entirely different proposition, especially when the games cost a fraction of what wii games cost. If nothing else, it leads to a wide choice of demographic targets for Android developers to choose from, and I don't see why anyone would think that's a bad thing.