You two have nailed it for me. I don't collect anymore due to both prices and space issues. I don't even have enough space in my room for all of my DVDs (and I don't have that many. I recently consolidated my entire Dragon Ball collection to a very large DVD binder to save space). I have a very small room and house.
I just need to get around to getting some flashcarts. I only really collect for Game Boy because the system holds a very special place in my heart, and not many games are too expensive for it right now. I am getting a GB flashcart at some point though for the odd expensive titles. I also buy PSX games because prices for most of those games aren't too bad yet either, and I don't have any other means to emulate them on a console (the Wii emulator is terribly slow still).
Right now, for 2600 - SNES and Genesis (and some N64 games), my two hacked Wiis are very serviceable, and in some cases, preferable, like the ability to play Star Fox 2 on a TV with a controller for dirt cheap, rather than paying $100 for a repro. I used to have a problem of losing interest and not sticking with my games due to having so many at my disposal, but I've managed to break away from that, and now I am able to commit myself to a few games at a time.
I will probably still get a handful more NES-SNES and Genesis games, but only the ones I had as a kid for the nostalgia factor.