Generation groupings of consoles have tended to be very time based because they tend to be used to discuss which consoles were in direct competition for sales and third party resources. The technical capabilities of consoles have never been that important, and systems with massive differences in abilities (potentially larger than the current generation in meaningful processing power difference) like the N64 and the Atari Jaguar have been part of the same generation before.
Personally, I think it is important not to focus on processing power and graphical capabilities when trying to define a generation because we are approaching (or have passed) a point in time where they are a meaningless metric ... Soon enough we will have hardware which is as much of an improvement on the PS3 and XBox 360 as the PS3 and XBox 360 were on the Dreamcast or N64; and this hardware will be as small and energy efficient as the Wii. Once we have passed that point, it doesn't matter how long the gap is between generations it will be the graphical improvement between generations will be fairly meaningless.
