I agree that the 360 isn't dead. It's here to stay, and the PS3 will not be catching it for another two years. That means it is going to get plenty of game development.
However, I'm pretty sure Microsoft started out this generation selling the 360 at a loss, so that point isn't quite right. I do believe they are selling at a small profit now (not sure if I am right on this).
I would like to point out that Patcher is generally viewed in a negative light on this site, since he is wrong so often.
I actually agree with you about BluRay. I think it will have a very tough time catching on with average consumers.
As for your other points about development costs, and install base, I think you are forgetting that little white box known as the Wii (although you are right if you only consider the HD consoles).
Switch Code: SW-7377-9189-3397 -- Nintendo Network ID: theRepublic -- Steam ID: theRepublic
Now Playing
Switch - Super Mario Maker 2 (2019)
Switch - The Legend of Zelda: Link's Awakening (2019)
Switch - Bastion (2011/2018)
3DS - Star Fox 64 3D (2011)
3DS - Phoenix Wright: Ace Attorney (Trilogy) (2005/2014)
Wii U - Darksiders: Warmastered Edition (2010/2017)
Mobile - The Simpson's Tapped Out and Yugioh Duel Links
PC - Deep Rock Galactic (2020)