Just for the record, that's the Nintendo DS, which is also a touch screen (albeit with a stylus) so the gameplay wouldn't really suffer.

There are more iOS devices than Nintendo DS devices, for what its worth.

But they're a demographic that bought them so that they could spend $20+ regularly on video games so you could expect penetration or prices to be higher.

and there are more people in Europe than the USA - but that doesn't mean you ignore the US market.

Even if all things were equal, Nintendo portable is still a huge market. While the lines are blurring, I still think DS is a game device, and iOS isn't - specifically with respect to how much people pay/expect from games. The development costs for DS would be higher - as you'd have to build a longer game, but the so too would the margins.

Given that Nintendo is currently afraid of the iOS platform, I don't think it's a given that putting it on DS would mean much.

I don't know why you'd say that Nintendo is afraid of iOS. Or rather, the reasons for them being afraid of mobile platforms is a little different than you are implying. During Iwata's keynote at GDC, he spent a while talking about these platforms and how they are saturating the market with low-quality games that are bogging down the industry as a whole and lessening the value of big budget, well-produced games made by your more traditional gaming companies. He's afraid that the value of content will decrease as the amount of content available increases, which is certainly a valid concern.

If you meant that Nintendo should be afraid of the massive success of iOS, then yeah, I kind of agree. Still, making a sequel to a monumentally successful mobile game on the most successful gaming console at the moment (or its 3D successor, due to launch soon) would hardly be a bad idea. Yeah, lots of "non-gamers" love Angry Birds, but that's the same market that Nintendo had been going after with the DS in the first place (remember Brain Training?).

Railing against the quality of games on the platform is rich, coming from Nintendo, since the Wii is a landing zone for shovelware like never before, and the DS has been just as bad.

I chose to interpret their GDC keynote as an attack from being backed in to a corner. Someone else stole their schtick, and now they are panicking.