Points in bold.

That's true. However, even great games can be made better through power.

Just look at Wind Waker HD compared to Wind Waker. It looks stunning. Or the Last of Us compared to the remaster, or Grand Theft Auto 5 compared to the remaster. The core experience is the important part, so I see your point, but even that can always be improved, if only visually. 

This.  We would get a 'meh' increase in how our games play and lose all the conveniences of the OS

A 30% increase is hardly meh. That's 1080p, 60fps with larger game worlds, faster loading, better physics, etc.

How did we survive without an OS running constantly back in the golden age of gaming (PS2 era)?

Also, I'll include my quote again, showing that you'd hardly be losing a lot of those features.

Basically you're asking for modern consoles to remove the OS? And revert back to classic systems that just start. It probably wouldn't help. Developers always complain there isn't enough every generation. Because they keep making their games bigger than the system can output, with a limit. It help in one area though. You can just shut the system off without waiting for it to shut down.

No, what I'm saying is that there is an OS when you startup. You can access Netflix, web-browse, message people, buy games, etc. while in the OS. The moment you start a game, however, the OS ceases to run unless you exit back to the home menu, instead giving 100% of the power to the console.

It still essentially turns all other functions off. For online to work you'd need for the game to handle a lot of things. Like the friend invite system. You couldn't do the background video recording on PS4. Making the consoles features a bit moot. The throphy system wouldn't function either. Unless the game tells the system to check save data to update it. The Wii basically functioned the way you're thinking. The home button screen is actually fake. It's built into the games themselves.

That's why I said in retrospect (and theory), the games could have been better if we cut some of the stuff.

You can have friend-invites, why not? Old PS2 games did it eons ago. A game would simply access your list of friends stored on the system, and see if any are online in that game. Simple.

Trophies are already handled by games, not the OS. The game stores the trophy on the system, and then the OS uploads it to the network. The upload can happen while in standby (that's the way it worked with the PS3 anyway, with every trophy being synced when you accessed them).

Background video-recording is a huge gimmick unless you like streaming on Twitch. I'll take better games over the ability to record them and upload them to Facebook.

The OS of the Wii U doesn't hog resources? The OS has a footprint of 50% of the RAM! Only half of the 2 GB RAM are available for games.

The 360 had an OS-footprint of 6% (32 MB of 512 MB), the bloated OS-footprint of the PS3 is reduced to 10% (50 MB of 512 MB) since 2009: http://community.eu.playstation.com/t5/PS3-General/PS3-OS-memory-footprint-slashed/td-p/9874872

So... does the Wii U switch off the main processor outside off a game to save power consumption (idling in the main menu, eShop, internet browser, netflix...) and only uses the ARM processor? Obviously not... besides standby the WiiU always takes the same amount of power, no matter if a game is running or if it idles: 28 - 33 watt

http://www.anandtech.com/show/6465/nintendo-wii-u-teardown

https://www.ifixit.com/Teardown/Nintendo+Wii+U+Teardown/11796

Eh its 2014, I think that people (myself included) expect a lot of things that you are going 'meh' at like background downloading and custom soundtracks.

Also I'm no programmer, but I don't think its as simple as "You can have that [friends list] without the OS running constantly. An individual game can access your friends list and then allow you to play with them." if the game is using 100% of the console.  I wouldn't want to go back to the PS2 days of having separate friend's lists for each game *shudders*