Does anywhere in this artical say the games are cheap to produce? just because you have no interest in the game doesn't mean it took 10 hours and $100 for Joe-Shmo to produce the game.
Infact it might be harder and more expensive to make a game for a toddler because a toddler can't tell you what he/she likes, you need a lot more market research to make a game for a 2 year old than an 18 year old. You also need to market to the parents because they are the ones who are going to be buying the game.
you're wrong, plain and simple. making toddler video games isnt going to kill a system, and i have no idea why you think it would.