There is a lack of decent new games for the DS atm, however, I don't buy that many games anyway, I generally play the same games for a long time.
Usually Puzzlequest, Etrian odyssey, Mariokart and a few other games.
It IS true the the Wii has eaten into my Game purchase budget as well, what with recently buying Mariokart and a couple of other games.
But then again, it's all going into Nintendo's pockets either way (apart from my PC games purchases)
Also, I think Third party software houses generally don't produce games as good as Nintendo does (and the sales of them reflect that), so maybe they're getting less keen on producing games for the DS.
I hate it when I get burned when inadvertently buying a garbage game, although I will check out videos of it on youtube or something before purchasing, but sometimes they slip through, additionally there are SO many bad games on the DS. I think this is affecting their sales of games and thus new games coming out.
Is the DS in trouble? I wouldn't say "trouble" but yeah, I think it has peaked.
I would buy a PSP if there was some more games I like and it's really cheap now too (too bad it doesn't have a touchscreen).