Excellent post by the OP. I agree with almost everything he said.
From my viewpoint (a technical one), this generation has even more reasons than the ones listed to "last". Those who think hardware will continue to advance as it has in the past generation, merely because GPUs have some mild room for growth, and because of parallelism, aren't looking at the big picture.
Consoles are supposed to be cheap. The PS2/GC were miles ahead of the PS1 and N64, as far as the gamer perception went. The PS3 and X360 aren't anywhere near as impressive, relative to the last gen, as the gen before was to its predecessor. There's a good reason for this, and believing that spending billions to research a "next gen" beyond the current that can produce a significant improvement (i.e. worth the consumer upgrade, from their standpoint) is folly, and in a big way.
10 years, in my opinion, is right on the money for this gen's life cycle. No new consoles until 2013 at a minimum -- 2014 or later is more likely.
