The thing it that never, ever games looked as good and cinematic as this gen. It was more of a visual than gameplay bump. Gameplay wise most games would have been a possibility, but their enjoyment would have been limited by awful framerate issues and ugly presentation. Also there where some experimental games, like mentioned above (Fracture or Portal) that didnt base their strength on presentation, rather on physics. That thing consumes far more hardware than people think.

Than there are multiplayer games, like MAG, that last gen couldent have handled them.

Never the less, I doubt that games like Red dead Redemption, Gears of War, CoD post MW, Uncharted, GoW3, SMG could have been pulled off as they are by last gen tech.

And then there is the motion control thingy... that one gave it a totally new twist.

Overall Im more then OK with the effect of hardware specs on gaming evolution.

But half life 2 is on xbox and isn't that the same engine used in portal?

edit- Damn beaten by kain

No, they could have easily been made on last gen consoles they just wouldn't have looked as good obviously. 

Most of the big moments in God of War 3 would have been impossible last gen due to being completely incapable of rendering a 2000 foot tall interactive enemy (no, nothing in GoW2 or SotC comes close).

And I'd assume only big and/or complex games like Skyrim, Red Dead Redemption, GTA IV or the Mass Effect series wouldn't have been possible last gen without major sacrifices. I believe the majority of games this gen could be completely achievable on last gen hardware with very minimal sacrifices. 

Is the titan in that picture really that big, or is Kratos just tiny?

Think about it like this: Two characters are rendered at the same time. Scale one down, reduce it's detail, and drop it on the other character's shoulder. Now it looks like one is huge, but really you just have a character being rendered like any other. Could it be done last gen, maybe not, but is it really that impressive, I don't think so. It looks great though.

I agree that some of the titans scene in GOW 3 was impressive especially when the camera zoomed out then in again. But was there not a similar thing in GOW1 when kratos was on the back of a titan in the desert?

And I thought GTA IV actually suffered with the transition to HD because most of the elements from San Andreas were removed.

The thing is are those bells and whistles becoming too important.

A lot of 360/ps3 games and none of the wii games.

mass effect 2/3
uncharted 2/3

GTAIV's physics were amazing. Way too much for a last gen system to handle in an open world game.
Skyrim quickly comes to mind.
LittleBigPlanet for obvious reason.

But thats like saying most games on PS2 were not enjoyable because of ugly presentation, and half life 2 was on xbox which uses the same engine as portal.

Games that gameplay are heavily focused on online interaction would have been a problem though.

If the motion control was used wisely like in wii sports resort for example then that could not have been done.