Is Apple dropping the Gamer Ball?

Is not releasing an SDK smart?
At least to a core set of developers. Lets face it, if you own a iPhone or and iPod Touch you are pretty much rail roaded into using iTunes for good or bad. Now wouldn't an actual games section in the iTunes store (iGames) be something that the iPhone and iPod Touch owners just eat up. Actual games not developed to run in Safari? I'm sure Apple could work with some of the major game studios to develop some amazing game downloads. Every one would be running out to buy a game controller and maybe even myvu glasses to enhance the game display.

I'm not saying that developing games in Safari HTML (development center) is horrible. Just limiting! One big issue an SDK release from Apple could cause, a DIVx video player might get developed. I'm sure that iTunes managers cringe at the idea that a player that could play something other than MP4(AAC) files might cut into iTunes sales. I think that if someone wants DIVX on the iphone, it's becuase they don't want to convert the file they got from some other place. They most likely only use iTunes to sync the files anyways.