I couldn't agree more that the HD consoles are exactly where they need to be. I've said repeatedly before, there's really nowhere to go just yet. 3D isn't popular enough and the TVs aren't going to make a splash for a few years yet (at least), Microsoft might be able to finangle a Blu-Ray player into their stuff, or maybe an add-on to the player that they license Blu-Ray from Sony, but, generally? This is pretty much it for a while. They'd be fools to pull another out when both companies are now in the black on their consoles. They're profitable per unit and they shouldn't throw that away. A new unit would sell, true, but they'd be killing their golden goose with even more debt from development.
Sony and Microsoft fans alike can agree, despite all the arguing, that without the other, the current level of stuff we're getting wouldn't exist. It's the 'next gen' competition that brought us to this point and it's a nice, level point to rest at while they churn out more games and peripherals for the consoles of our choice.
Nintendo is on a different playing field right now and they've captured a LOT of casual gamers. More power to them on that. As said, though, they'll join the HD group eventually, they'll get more competitive games as well and then we'll have even more competition.
It's a good time to be a gamer. We could have better stories, more gameplay and, who knows, maybe as costs come down for development as technology improves, we'll get that and we'll have our own little gaming renaissance of kick ass graphics with kick ass gameplay and stories. But, for now? I think we're in a good place.