Sorry, Drunk Canadian, I don't agree that casuals have killed the industry. I believe greed has.
Casual games (or any 'pick up and play' style titles aimed at universal entertainment) have brought a lot of new blood into gaming. Nintendo knew they couldn't carry on competing with the likes of the Sony/Microsoft style 'hardcore' consoles and instead through the Wii and the constantly evolving DS platform have targeted everyone else, stopping only for a moment to pander to the fanboys and nintendo faithful with a handful of 'proper' sequels.
The question to ask is, has this shift towards catering for the non-gamer killed hardcore gaming? The answer is obvious to me - how could it?
As long as there is a demand for hardcore and non-casual games, companies will continue to produce them. After all, many devs and designers are hardcore gamers too - where do you thing many of the inspirations come from?
The problem for me seems to be lazy greed. Why spend effort producing something original and entertaining for your gamer audience when you can churn out a tired sequel that you know fanboys will lap up regardless? It costs way more in effort, time and real cash to produce something new and special, which is why when these games come about we should drop our programmed loyalty to the franchises we love and give the new stuff a go.
Braid was a great little game that harkened back to the ingenuity of the 8-bit era, when programmers were forced to be original because they didn't have the luxury of bigger, better and more. Limitations were on the hardware, not on the allowed imaginings of gaming staff. The recent Rocket Riot on XBL is similarly 8-bit in feel, only polished for the next-gen systems. it isn't particularly original but it's a hell of a lot of fun and well worth our pennies. These aren't the only examples of great games off the beaten track - the franchise machines aren't the only place we can get our gaming fixes (Steam is an excellent place to see this in action).
Yes, casual games seem to be the most original but I think that's only because we as a gaming populace have starte to see games as mainstream or miniscule. Because there are so many 'miniscule' games appearing to cover the creativity gap we brand them as casual, not knowing the depth of gameplay or the buckets of fun that can be had with them.
Casual games aren't killing the industry, it is budgets that are stifling the creative output and blind gamer loyalty that is fuelling the lazy franchise machine.