More like they had a disappointing release after all their hype about the hardware.
Not that I know any more about it than you do, but common sense and experience dictate that no console is going to fail due to technical difficulties, not unless it's a truly staggering percentage... And according to all I've heard, this is a fairly small one.
In any case, my general policy is to not buy things right away and to let them drop in price, or at least have the kinks ironed out. So it's all good as far as I'm concerned.
I would agree. Look at the XBox and the RRoD. Even that didn't kill the xbox, though that may have been because it didn't start kicking in until about a year after release.
CS/CpE. Yay engineering!