RPGs being "relegated" to handhelds has more to do with the dominant HD consoles in Japan and NA being different, while everyone in both regions owns a DS and to a lesser extent PSP. Outside Squenix and Pokemon, RPGs tend towards fairly niche titles that lack the budget to go multiplatform.
agreed, but as the western market takes over even the handhelds (and the vita will do this), you will see fewer jrpgs on the handhelds too. JRPGs are still dying, even if the DS and PSP are pretty much top 5 JRPG systems.