Third parties will kill the PS4/720

[Barozi]

eh there's enough room for improvement from last gen to this gen.

Imagine bigger cities and nearly every pedestrian with its own (decent) AI. AC3 was clearly handicapped by PS3/360. Just look at the draw distance.
Other example: Draw distance in Skyrim on PS3: http://threepartstheory.files.wordpress.com/2011/11/newps3_013-bmp.jpg
360 version is only a tiny bit better.

Textures will be much much better, add to that dynamic lighting/shadows, improved physics, animations, AA, possible 60FPS and much more. They will feel like completely different games.

You think that PS3 games would not be possible on PS2, but that is only rarely the case. Most would and with the exact limitations you mentioned in the OP.

Since PS4/Xbox³ have more power they will more easily handle split screen in games. Obviously it would be the developer's choice, but a 4 player splitscreen campaign or online CoD with decent graphics would certainly be possible.
Now if you say that split screen was already popular during the PS1/N64 era I'd agree with you, but if you play these games again you will easily see that the 4p splitscreen mode runs barely above 20FPS across nearly all games. The same could be done on PS3/360 but would be unacceptable by todays standards, that's why not many devs are doing it.

Also imagine with possible keyboard/mouse support, games like Total War or Starcraft 2 would be possible.