Yes the PS2 is competing AGAINST the other consoles...it is part of the market, so it competes against the consoles of this generation, but it is not a console OF this generation.
The PS1 competed against the PS2/GC and Xbox.... the SNES even outsold the PS1 for a while, and the NES competed against the MegaDrive, TurboGrafx and SNES.
The term "generation" is used to divide the consoles up into groups to follow major hardware revisions (Wii is a hardware revision from GameCube, X360 from XB etc).... The Market is a different thing.... and everything in it that is selling is competing against everything else.... it is best to view this on a weekly or yearly basis, or within set time periods that are EQUAL for all consoles (which is why PS2 is included in the weekly and yearly figures)
The generation is viewed differently, and time doesn't really matter (for instance if the N64 had for some reason outlasted the PS1, and eventually outsold it it would have been the victor of it's generation, even though after the PS1 died it would not have been competing against it in the market anymore)
