PS2 was more expensive than PS1 at release.
At the same time growth in power was much bigger back then. Not only for consoles but for all that computer stuff. Actually one of the reasons PC's were outdated so fast back then.

Right now PC's have the same problem. You can be happy if a new GPU generation is 50% faster then its predecessor today.

About Xbox 360 at release:
Fastest graphics card back then should have been the (rare) GeForce GTX 7800 512MB. Though you could have those as SLI system.
The Xbox 360 GPU was at least as fast as the GTX 7800.

Sure. Diminishing returns. PS4 is more complicated you're not just developing hardware you're developing a vast multifunctional OS spending over a billion in R&D.

But the main reason is PS4 costs X amount to produce so they sell it at Y amount. 

Cause it was late as fuck.  (But its ok cause Delay's mean better games right?!?!?!?!?!!?)

#Delay4BetterGame

PS2 did come after the Dreamcast, but well the Dreamcast OD'd on blast processing.

That depends on where you're from. Here the PS2 cost 500€ at launch. Another thing is, how much loss you're willing to take by selling one. Then again, compared to the current gen, PS2 did not have a HDD/SSD, no Wi-Fi, no bluetooth, had wired controllers without gyroscopes/accelerometers or screen, no HDMI, was made of cheaper plastic, it did not need extra horsepower to run OS in the background. Every time you add something into the console, it comes with a cost that you, as a customer, pay. And every time there's someones patents/trademarks used, you need to pay royalties for it.

Naturally it depends what tasks they were supposed to perform. Xenos benefited from being designed to be used only with one hardware, whereas 7800 needed to work with lots of different type of HW. The eDRAM really boosted the performance of the chip, but on a downside, the GPU suffered from slow VRAM with high latency.

I'd remember PS1 was damn expensive at it's Japanese launch.

Overall. Consoles have HUGE % of video games overall sales, especially multiplats. Its safe to say there is 4-5x difference in favor of consoles.

Since 2005, PC's video games market is not big enough to fund a truly AAA game, except WoW. The rest are poor ports,  just look at Max Payne 3 - 8 GB RAM ( more than console devs have now ) required in PS360 era. That was a bad joke back then.

Not to mention consoles exclusives...

Back to the topic - Is 900p okay ? 

It depends -If the XYZ game is avaiable on 2 - 3 platforms, and one of them is 1080p and the second is 900p, its bad to have 900p. Same goes to frame per seconds. 

Why would anyone feel cheated?
Both PS4 and X1 right from the start had questionable specs.

Really disappointed in the specs for this generation. But whatever. I have my PC to solve that fix. Hopefully next gen they actually deliver with the specs and make 4k capable machine.

Bloodborne, Uncharted, TLoU, Mario Kart8 and Halo 5 are sad pandas now.

Numbers have always been meaningless when you're having fun.

So yeah, 900p is okay. It has always been.

If you have an issue with 900p then you must be gaming on a pc at 4k... or at least 1440p.... otherwise the difference (between 900p and 1080p)is rather small especially when scaling is present.