As for the thread title itself, no, this is not the last generation of graphical increases.
Given enough time, all components/products fall in price. Example: CRT TVs. It's getting to the point where low-end LCDs can be manufactured and sold for a miniscule premium over a high-end CRT of similar size.
Another example: DDR RAM is cheaper than SDRAM today, but when it came out it commanded a premium over SDRAM. However, since DDR RAM is the current standard, its prices have fallen. Now DDR2 will take its place, as DDR3 slowly becomes mainstream.
Eventually new technology replaces old technology, and it becomes cheaper to implement the new technology instead of the old. Hence, console manufacturers (especially Nintendo) will opt for the better-performing piece of technology, not because of its performance, but because it gives them a lower manufacturing cost, a price advantage over competitors, all the while maximizing their profit margins simply because the new technology is simply cheaper.
