I don't get what the issue is. You have two choices.

A $300 900p-1080p choice or

A $500 1080p-4k choice.

You play the same game just with different settings. You pay either more or less for the setting you want.

But its like people saying, I want to pay $300 for a console and I don't want there to be a $500 version of my console out there.

Makes no sense to me.

You are ignoring the impact the $500 version has on the devs. If they develop with the $500 in mind the game will run like total crap on the $300 one, if they just throw a second tought optmization patch on a game developed for the $300 version you won't see much difference on the $500 version. Not to mention devs now have to develop a game that runs well on 5 (or 6 if we count NX) different plataforms.

Ppl like consoles because they are not PCs, they are closed environments that last for a long time, you know what you are getting when you buy your box. This recent hysteria towards resolution and fps made the console makers think the gamers care only about visuals and this new approach actualy kinda sucks.

Anyway in my opinion neither the Neo or the Scorpio will have much of an impact on the overall scenario, they'll be too expensive and I believe devs will just develop for PS4 and XOne and throw a quick patch to make the games marginaly better for Scorpio and Neo. 

Both Sony and Microsoft stated that their Neo and Scorpio will be aimed to a Hardcore fanbase, And when a company say that this means that they will price their product much higher than the normal, Both Neo and Scorpio will not aim to become popular they will aim to make profit so I don't think that we will have much to worry.

More choice for the consumer is a good thing.

Not sure how I feel but I'm leaning towards this. Once I know more then will see how I feel. 

Actually PS4 Neo wasn't that bad.

Sony's initial message was that Neo was only going to be an improved PS4 that has all the games shared to older PS4s. No exclusives for Neo etc. Gaming still in native 1080 but with the addition of 4k for videos.

Now they're seemingly going toe to toe with Microsoft's hilarious circus. Sony really doesn't have to do this. Just let MS shoot themselves in the foot because they're cannibalizing on their own SKUs.

I'm right with you on this. I am all for the new scalable console platfotm. It is not anywhere close to the burden devs faced making games for PS2/Xbox/PS3/360 or PS3/360/PS4XBO, because the PS4 and XBO family are all on near identical hardware, just scaled like making a game that runs on either a 450/460/470/480 GPU.

Like you have said, right now we will likely have,

Holiday 2016

PS4 - $299.99 

NEO - $499.99

Then, 

Holiday 2019

Neo - $299.99

PS4 Spec 2 - $499.99

This is great for consumers. It actually will see the product supported longer, and all content will continue to be supported going forward, meaning you don't have to start from Zero every 5 - 8 years.

Additionally, now Sony and Microsoft can keep the tech relevant longer, and when something like the PS5 comes out it can be a true leap. The PS5 can have SSD, HMB 3 or 4, and other more advanced tech that would be otherwise out of reach in the normal time span. This means bigger generational leaps, longer generations, and morw options. It doesn't get any better for consumers.

This is the positive view, and the one I hope will be the right on, but I think it won't and the updated consoles will screw devs, alianate users and screw the console market. Lets hope you are right and I am wrong.

It's like 4 AM here right now, so my concentration isn't at it's best. However, I tried to skim through it, but those longer paragraphs made it really difficult. Would it be possible to split them into even smaller paragraphs? I don't think it's ever recommended to write that long paragraphs. And I mean this as friendly advice.

Anyway, from what I can tell from the text, the major concern it presents doesn't seem that big to me. It seems that the major concern is unfulfilled potential, and I don't really see it as a problem. It's unfortunate if consoles' potentials go unfulfilled, but as long as it's still adequately used, I don't see a problem. And more importantly, even if there was a problem, it seems to be a problem for console gaming and not gaming as a whole, like the title seems to imply.

That doesn't mean I like iterative consoles though. For me, they outright kill the strongest point consoles have, which is having the same capability for a console's lifetime. If upgraded models start coming out, I know I probably won't be content with the old model. But since the new model will cost more, there will be no point at which console gaming is cheap enough for me to even seriously consider. I get to play most games on PC, so I'm not really lost either if I don't have a console. There's other issues too, but this is the one I personally care the most about.

i think both were actually releasing upgraded model mainly for better VR experience instead of wait until next gen, whether you interested in VR or not, you have to accept that VR is the current technology hype