I'm sure there is a group of people who would rather pay more money so that the tech used in the next generation of consoles isn't so far behind. That's a fair stance, except that in order for consoles to not be completely obsolete, the generations need to be shorter on top of the tech being more advanced. I doubt either of those are going to happen.
If Sony or Microsoft release a $700 console, it'll be dead on arrival. People need to understand consoles are not PCs. Each have their strengths, but if you want the pinnacle of tech, probably best to go PC in the first place.
Yeah, that's exactly the kind of people that were talking there. I'm not sure about the need for shorter generations though, although it's a fair point. At first you might be going for the more demanding crowd but once the generation matures a bit, you'll be more and more interested in the bigger crowd that's not willing to pay as much. That way there won't be as much demand for more processing power later on in the gen.
I agree about the price point though.