And it did it in only 16 months! Now we only have to wait 48 months and it will be at the same as the PS3! The PS4 is a beast!

There is zero benefit to anyone for having a shorter gen (4-5yrs). And contrary to what some may think, its not even feasible. Billions are spend R&D'ing and launching a new console (including marketing) So it doesn't make sense just ditching it 4yrs in and making a new one. More importantly, look at it from a hardware perspective. A new console has to cost around $4-500 max to be remotely successful. For a platform holder that means pitting in hardware that is around $100-200 more expensive than their sticker price in the retail market. So in 2017/2018, what kinda CPU/GPU/accessories do you think you can get for $600 that will be in a $400 box? Will it be a big enough jump to warrant a purchase? As its stands, if they made consoles in 2017/18 with about 2-4 times the power of the current consoles, the only thing they will manage is slightly higher rez and higher frame rates. They won't even be powerful enough to do 4k gaming at 30fps.

To OP. Yeah its pretty crazy when you think of it, in under 16 months the PS4 has done what it took the PS3  over 20 months to do. And it hasn't even got its first price drop yet nor has any if it's killer apps been released. 

That 100-200$ markup is in consideration of market retail prices.

Generally, when console makers have deals withn manufacturers, they're getting the parts at a pretty hefty discount. Then consider that PC parts come down 20-30% within a couple months. The console makers generally get those price cuts and more way before retail cuts.

First it's MSRP, then it's small cut, then rebates, then both, then actual price drop, although not particularly in that order.

The other problem is that even if you have so much power, you need the games there to back that up. If nobody is using that much power, it will go to waste. Consider the discrepancy between PC and console. You can build a PC that can outperform current consoles many times over, but do the games actually show that difference? Not really. Because games are programmed to have a baseline for all platforms. Like, imagine if the wii sold 200m and the competition sold less than 40m. Most games wouldn't be made to have the best graphics because that isn't where the money is.

Similarly, PC and console are almost hand in hand with each other when it comes to games and performance. They are each respectively limited by each other.