It's a good model for MS. Maybe not for Sony, but MS doesn't have much to lose, it's not like the current status quo is doing great for them. Becoming more like the PC just makes sense for Microsoft. If you don't like it, buy a Playstation. But odds are you were already in that camp anyway.
I think if given a choice lots of people will opt for an easy to upgrade console that they can do on their own terms.
This is like I remember Apple fans trying ardently to argue that Apple should never make a large screen iPhone because the iPhone 4 was perfect and shouldn't be changed. But the new iPhone models with choice for the consumer broke all sales records.
Choice is fine, no one is forcing you to upgrade your Xbox, just like no one is forcing you to buy a 5.5 inch phone if you don't want that.
Just because MS releases an upgrade doesn't mean you have to freaking buy it DAY ONE EMREHRGAWD OR YOU CAN'T PLAY GTAVII!!!!!! or something stupid like that.
You like 5 year cycles? Great. Then keep your hardware for 5 years. No problem. All it means it some other people will more disposable income than you maybe get to play at a higher resolution + few better effects.
Even most PC gamers don't buy a new GPU every 2-3 years. But there is a choice of a new GPU every year, it's just about where you are as a consumer and what you feel like doing.
