You're focusing too much on the costs, and assuming the best, when time line, performance, marketing, and brand image would be just as important if not more. While MS wouldn't suffer the same way Sega did due to their online infrastructure, in terms of hardware, it would likely end up a Dreamcast. There's even articles about Halo supposedly being proposed for PS4, and now Phil is talking Gears 5 potentially. Why do that if you're planning on selling enough of your own hardware?
I focused on the cost/performance, as every console manufacturer does. About the timeline and brand image, well, anything is better than what they have now, and they certainly would market the heck out of it.
Can you stop with that Dreamcast crap, please? That's simply not comparable. If you want to compare, then take a console who launched early, were comparatively weaker and didn't got pulled out after a year or so, like Megadrive/Genesis, Saturn, or Wii U. And as you can see with the inclusion of the Megadrive/Genesis, that's no guarantee to be a flop.
Yes, they are talking about bringing their games to PS4. But that was more or less the plan all along: Originally, the Xbox was created to promote PC gaming, and more specifically, DirectX (which is exclusively on Windows as opposed to OpenGL), hence the name of the console. Don't forget Microsoft is a software company, and only got into hardware with Xbox. What they wanted is to sell software through Xbox - but it turns out, that they don't necessarily need their console to sell the software.
In fact, since you kept talking about Dreamcast, I expect them to pull a Dreamcast in the way that Microsoft is going to stop their console division and simply becomes a software publisher again. However, unlike the Dreamcast, sales or financial losses will have nothing to do with that decision - just that it's not necessary anymore for their plans.
The Nintendo eShop rating Thread: http://gamrconnect.vgchartz.com/thread.php?id=237454