No, it's a flaw in the parsing of the DSi's pit.bin (a photo database file).
The equivalent file in the 3ds camera app is phtcache.bin, and it isn't vulnerable. It's been checked by a lot of people, including me.
Yes, they can but they've ignored dsiwarehax for the last 21 months. Steelhax has been ignored since 2016.
Doesn't mean Nintendo might not change their mind and patch them, but it seems unlikely at this point.
Either way. There would likely be groups that would start up something to NTR extent. Some people wouldnt care about if it costs something if all else was to be patched. If people were to keep their wits about themselves on lower firms they still do have free ways in aswell.