Given the success of what many to consider casual titles on the 360 I wouldn't be surprised. Because of the nature of Kinect controls it can be really accessible. I don't think Microsoft are genius enough to pull of a Kinect Sports of the caliber of Wii Sports but I definitely think the potential is there.
I haven't seen many 3rd parties whom are good at creating expanded audience software. Microsoft's own attempts haven't been too stellar(More like exact rips of what Sony and Nintendo had done in that path before). I can envision so much more that could have been done with Kinect in it's current incarnation so I don't think better hardware means anything on it's own. It's going to be about developers thinking differently so I doubt it as that never seems to happen.
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