Here's my crazy prediction:
Wii U comes out Fall 2012 in US, cost 300USD, is sold at a slight loss for Nintendo, and offers graphics technically better than PS3. They've learned from their 3DS mistakes.
PS4 and Xbox 720 launch in Fall 2013 for 300-400USD, or more if bundled with Move and Kinect. Noticeably better graphics, most APU-intense games run more smoothly than their current-gen equivalents (consistent frame rates, reduced texture pop-ins, less screen-tearing, better physics and AI hopefully) and fully backwards compatible.

Id read somewhere ( in the last year)  that Sony was wanting to release the PS4 either slightly before or almost exactly with MS's release of the next generation Xbox.. and make sure not to have a repeat of the PS3's launch..

To me this is sound reasoning. Launch dates can change dynamics of a consoles sales.. But they also need to make sure the PS4 is not so much more expensive then the competitors console at launch..

Looking at the idea of launch dates.. Xbox 1, which was technically superior to PS2, launched 1.5 years after PS2 - (much too late)... Still, MS did something unexpected.. they still sold over 20 million consoles in a market dominated by Sony and Nintendo.. and did it with less developer support.. thus paving the way for Xbox 360.. people who bought the first console bought the 360 and of course more did..

The launch date in this competitive market ( as well as price ) can make a difference.. Despite who wins this current generation.. its now been proven now that you have 3 consoles with respectable sales.. Although Sony is not the winner it was with the PS2.. its certainly doing fine.. MS, although they could end up garnishing 3rd place ( a price cut soon could make it close ) they certainly can't feel anything but good. They have had a good profit margin on 360's since the end of the 2nd year they have manufactured 360's... 360's profit margin on games sales has been great  .. and MS has more then doubled sales of Xbox 1.. Next generation they should have no trouble selling millions more then this gen..

Im hoping next gens consoles are better priced.. Im hoping to have all 3 consoles..

In the end, responding to the OP... Why would it be insane for Sony to launch in 18 months ? It wouldnt.  If MS releases a console 6 months or a year before Sony with far superior technology over the PS3 - ( in this scenario) MS would get a bigger headstart next gen - then what 360 did over PS3 ( because  alot more PS2 fans held out for PS3 at first and many of us later bought an Xbox 360 like me ).. And next generation looks to be more enticing.. The next gen Xbox may include bluray.. as far as console technology the leap looks to be more significant next gen..( AND More importantly game play ) looks to be richer and fuller..  A.I. will be so much better that mobs will have much more unique personalites unlike today where mobs are pretty much one intelligence.. You'll see  RPG with much more unique and robust personalities.. 

PS4 having more games via download ( aka Microsoft ) would not just possibly lower the price of games.. it would also increase Sony's profit margin - just as it has for microsoft now.. You no longer have to absorb the extra cost of bluray disc ( 5 dollars a pop ? ) and the plastic case it comes in - and printed book - nor do you have to pay for the logistics ( shipping ) worldwide..

The OP behaves as if PS3 has screamed profit margin.. even if PS3 would outsell Xbox by MILLIONS... MS will still actually end up with a bigger profit margin (this generation) because of the handling of PS3 and wasted money in CELL development, bluray.. PS3 COST Sony 4.7 BILLION in wasted profits ! ( They lost 199 Million just from the recent PSN hack ). (**PS: To be fair - MS did lose 4.2 million on Xbox 1 - but MS knew they would take a loss when being a new player.. just getting started as a new player is a big cost alone ) .. Even though Sony has made a profit from PS3 for awhile now - they may still be negative over the life of the PS3 - I mean they have to made 4.7 Billion just to break even !

To me PS4 could be the console that gets them back on track.. Why would they not be anxious to get it out sooner.. especially if the console as a whole is win win.. ?

*PS3 cost 4.7 Billion  http://www.joystiq.com/2009/10/30/ps3-has-lost-sony-4-7-billion-may-be-profitable-next-year/

I love this statement in so many ways.

1. "At the moment" the article is published, it's 09/01 and the number linked was published 08/12. Unless the article took 3 weeks to be published after it was completed, "at the moment" PS3 is actually not dusting 3DS in Japan (MC) or WW (VGC).

2. It's convenient to use 3DS numbers from the week before the price cut. PS3 was not outselling 3DS in Japan before price cut announcement, not on weekly basis and not for the year.

No I think fall 2014 is the most likely time PS4 will come out.

I also want to say to the OP .. yes displays will be no better then 1080p... but graphics will still look better.. more visual effects will be able to occur at one time.. you're talking about more moving objects happening without maxing out the console.. more explosions.. less dropping of frame rates..Graphically - quality if often sacrificed this generation just to keep frame rates from dropping .. so yeah 1080p is one thing.. but if you think every pixel of 1080p is being utilized now you're wrong.. they also tend to use a blur effect now to ehance the lack of this.. Epic has already shown what Next Gen graphics will look like and they are leaps above what we see now.. 1080 is in use now - but its not being fully utilized.. but more then that.. so much more can be done that has nothing to do with 1080p..

There are reasons to go one way or the other, but I think it's reasonable to think that PS4 will not come until Microsoft launches the nextbox, which in turn depends on how well Nintendo's WiiU performs.

If WiiU (which will probably be out in Fall 2012, ready for Xmas) performs well and turns into a threat for the Xbox360, Microsoft will announce a new console at E3 2013 and launch it later that year (Xmas 2013). And Xmas 2013 is aprox 18 months from now.

So the question here is if Sony also sees the WiiU as a menace, and does the same as Microsoft (meaning PS4 in 18 months) or not and waits 1 more year.

yea wht he said

Mmmhmm go on.

I guess nothing wrong with that, but thats playing it safe.. We all know MS, Sony, Nintendo ALWAYS deny anything 'officially' up till the end..
 No reason this is any different.. MS AND Sony officially announcing a release date now would definately kill sales the next year or two..

agreed