This could go either way if Asus succeeds. Having a second 'casual gamer' console would split the market between casual console and hardcore console. Now Microsoft and Sony wouldn't have to focus on dumbing down their hardware or software for a separate mass of people. Besides the fact that both Microsoft and Sony try to cater, in a sense, to home media as well as gaming (with Netflix and Blu-Ray), they wouldn't have to worry about creating the next boogy or 'flap your arms around like a genius game (although the latter can be fun when drunk).
The problem, though, is that the rift between hardcore gamer and casual gamer would be blurred in the next few generations when the hardware cost and visual rendering overlap. For the immediate, it would be a benefit to both the hardcore and casual gamer. For the long run it could cause enough direct competition that Asus, Microsoft, Nintendo, and Sony would be more worried about market share than the game/hardware itself (thankfully Sony hasn't fallen into this step yet!). I'm all for 'reinventing' gaming, but Nintendo just takes away from those of us that want a more advanced environment.