The entire business model of most console and PC hardware manufacturers, as well as the business model of most third party publishers is centered around the need for newer "better" graphics to sell their products ... Those that refuse to see the merit in a product like the Wii are rapidly going to go out of business because they can not see outside of the tiny mental-box they've trapped themself in.
Consoles have a major advantage because they can more easily switch everything up (new user interfaces, VR-Goggles, etc.) in order to continue growing the industry when processing power alone can not do it; by having a standard set-up for all users developers can more readily take advantage of the new-ness of a console and create something meaningfull.
