According to MS, the Series S can already do 1080p/60fps, even 1440p/60fps.

The PS3 can do 1080p/60fps, the Switch can do 1080p/60fps but Breath of the Wild runs at 900p 30fps and plenty run at 720p 30fps.

What a system can do is all relative to the demands of the game. Just as we've seen this generation, most single player games are designed around 30fps and maximum visual fidelity. This is unlikely to change. Internally Microsoft teams may target 60fps but we know thats not the case for a lot of 3rd parties.

At least for me that is the most reasonable one, same reason why I wouldn`t buy digital PS5 for 100 or even 200 less because I value physical so the short term saving don`t justify the 5 year ownership.

Well I dunno what you have as HW currently. But all MS titles you can play on PC and with XCloud soon enough you will be able to play most stuff on GP or Xbox with your smartphone. And considering MS reveal the only exclusives that are AAA that they will get on Series S or X over the next couple year is Flight Simulator, Halo Infinite (sometime 2021) and Forza. So you could keep playing the multiplats on PS4 as well if you have since the crossgen will still be there as well.

technically Series S could even do 4k60fps. It all depends on the game, some others even 900p30fps may be to much.

Ok, so this is getting to crux of what I'm asking.  I was under the impression that the Series S is powerful enough to give the best possible performance at 1080p, and that the extra TFLOPS, RAM, processing speed, etc of the Series X is wasted in 1080p.  So if a game is designed to run at 900p/30 it can potentially run at 1080p/60 on the Series X?  Is that possible?  I thought if a game was designed for a specific resolution/fps it can't go any faster no matter how powerful the console.

This is the first I've heard about devs having trouble with the XS S. I was kinda thinking I'd eventually buy an XS X for the 4K TV and maybe grab a cheaper S down the line for the other rooms in the house. Guess I need to do some research.

People should ask themselves why they would buy a console that's only 30% as capable as the X but pay 60% the price. It's just straight up bad value.

Well it depends...

A developer can hard code a game to work only at certain FPS and resolution (thus why some games when ported need to have that either unlocked or won`t see improvement on framerate and what not).

And yes a game could be made under fullHD on Series S (I doubt, but not impossible).

Also it is possible that some devs will allow us to have several options so let`s say you have Series X but don`t have 4k, so you can for example decide for higher quality RTX or Ultra effects like in PC.

The Xbox Series X should be able to detect your TV setting and adjust performance. You get the extra 500GB SSD, disc drive, much better rams and GPU.

OP does ask a very interesting question. If you only have 1080P tv or monitor. You are probably better off just buying the Xbox Series S, when your ready to upgrade you could sell your Xbox Series S and upgrade at a cheaper cost.

Well I doubt it will be cheaper to buy a Series S, sell and buy Series X couple of years later.

The Xbox Series X will give you over the Xbox Series S:
* HD and UHD Blu-Ray.
* Super Sampled Xbox, Xbox 360, Xbox One, Xbox Series X games where available. (I.E. Games will look as crisp as possible.)
* Better texturing.
* Better texture filtering.
* More storage.
* Better Anti-Aliasing.
* Better reflections, lighting and shadowing due to the potential extra Ray Tracing resources.
* Potentially better/higher framerates. (Varies by game of course.)

Just because a console is built for 4k, doesn't mean you don't get benefits on a 1080P display, once the Series X drops... My Xbox One X will be going into the games room on a 1080P 75" display and it will definitely look better than the base Xbox One.

The Series S *can* do 4k, but developers are very unlikely to leverage that.