There certainly is a diminishing return, and it's increasing. At some point what do you believe would be a huge gap with last of us ? Make it 1080p, multiply by 10 the number of polygons, add particules, improve anti-aliasing, make better textures ... would not make the result THAT different.
Also what make it so big is comparing last games of a very long generation to first games of the new generation. And state-of-the-art ps3/xbox 360 to mid-game PC based Xbox one/PS4. Not just the launch price, the manufacture cost is supposed to be half.







