Microsoft has far too much money to allow that to happen even if the rest of your prediction came to pass.

I think its unlikely. I could totally see it happening if it wasnt the US market that seems to act like nothing happened between gens.
Unless it sharply loses popularity in the US it will continue soldering on.

Microsoft will 100% try to rush the next gen again though, and that is my biggest concern, as last time it destroyed a large portion of the publishers/developers. If it happens again, i dont think there will be a home market left. Unless consumers don't go along with it. Knowing Microsoft's advertisement muscle and funds, it will be unlikely though.

Nah. The XB1 is getting less games than PS4/PC, but even if the NX ends up receiving a lot of support (with will be hard to get) I think the XB1 would still be far, far away from the Wii U situation.

Agreed. Nx is Nintendo's second coming. Eventually, ps4 will also stop getting 3rd party support when the NX hits 1 billion consoles sold.

If you want to lose some market share to competitors willing to sell on Xb1, shoot yourself in the foot and alienate the userbase to a point where they won't support you in the future then sure go for it. Logically that would be laughably insane though.