I think we're reaching a point where a system akin to the PS4 can pretty much produce any type of video game experience in a 2D or 3D space imaginable at a fairly high level visual fidelity at that.
The only thing you gain really from going higher is a prettier looking game at this point, but the higher end graphics of today are still very pretty and in some cases beginning to approach photo-realism.
If you go further than this level (other than just boosting the resolution/frame rate/adding some lighting/shader effects) the issue that you come into is budget.
Sure you can make a 25 Teraflop console with 32GB of HBM2 RAM one day for example .... but who's going to invest $100 million dollars per game to get the level of visuals necessary to push such hardware? Even the biggest publishers will start to balk once one or two of their games underperforms or flops.
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