I would somewhat agree with your analysis.
Blue Dragon was primarily created for getting a quick, easy, dedicated X360 JRPG fanbase in Japan by moneyhatting alot of big-name people (Gooch, Uematsu, Toyriama). It did 100% of what it needed to - get a bigger X360 base in Japan, and expand it from beyond the DOA and Western freaks there. Which it did. However, I do think that Blue Dragon is still a very important title for the West too - with it's cartoony graphics and such, it's attracting a fanbase that the X360 has never seen before in the West. Blue Dragon certainly doesn't cater to normal hardcore western gamers. Even if it doesn't sell unbelievably well, the base it sells to, aren't your typical gamers, and are really going to help the X360 reach much higher sales than the Xbox ever had.
Lost Odyssey - As far as I've ever read, Lost Odyssey is garnering ALOT more hype and love from East and West. Even the developer quotes I've seen as of late are saying the game is incredibly good. As far as my understanding is, they are expecting LO to vastly out-sell Blue Dragon in Japan, and there's been enough buzz for the game (#10 on the Famitsu charts), to show Lost Odyssey will grow the X360 userbase moreso than even Blue Dragon did. And likewise, as you've said, will grow Eastern userbases as well. The game has more West-Centric tones to it (than Blue Dragon), and will translate to strength there.
Now, Cry-On is a mystery. There's no real information about it, outside of tat my understanding is that the game is going to be told in mini-stories, and be very emotionally charged. However, outside of that, it's a mystery. However, it'll probably do well if LO continues growing the fanbase.
Realilistically, what Mistwaker is doing is trying to just throw out alot of new IPs (via MS's money), and see which ones hit and miss. IMO, Cry-On will probably do the worst (maybe Blue-Dragon type sales, but far less hardware impact). But for MS, they are really gaining a huge new userbase in Japan by sending Mistwaker the money they need.
And again, I will re-iterate that I absolutely love Blue Dragon. I hope it sells 100k+ first week. It'll be real interesting to see how it does versus Two Worlds.
Back from the dead, I'm afraid.
