I think there are a lot of good games out on next gen. There just might not be anything "wow" quality yet in terms of things you just couldn't achieve before. Still the biggest wow moment for me this gen was Dead Rising 3 and all the zombies on screen with a huge open world and large draw distance.
Most of the great games are cross gen. This will change in time, though.
Besides the cross gen factor, I think weak consoles is another reason people aren't compelled to upgrade. Personally I think the upgrades were worth it for new OS alone. But most people I know that haven't upgraded yet, simply see no reason to do it, because no games really wow them.