I'm not American, but I was under the impression that you were. My bad.
Your whole argument started with saying they should have flooded the market with consoles, since otherwise people will buy the other one. If you're talking about people that will buy two consoles anyway, it doesn't matter and there's no reason to flood the market. If you're talking about people who can buy one console, they will be fucking stupid to buy whichever one is on the shelf because the other one was more popular. The most popular console is always the best one to own if you can only choose one (toy consoles like Wii excluded).