At least that is what we hear in VGC over the past 10 years

This generation probably won't make it until 2030.  That would be 10 full years.  And even as streaming becomes more popular, there'll probably still be a market for consoles.  There's been a market for consoles since the 1970s, and nothing seems to change that.  Not the rise of PC gaming.  Not the rise of mobile gaming.  And, so far at least, not the rise of game streaming.  Despite it all, consoles are as popular as ever.

I stream some games to my console, and run others locally.  Some games lend themselves to streaming, such as ones that are slower, or turn-based, or are more demanding than your hardware can handle, or when fidelity just isn't crucial.  Others lend themselves to being run locally.

I predict game streaming may slow the rate at which consumers upgrade, but I don't think it'll actually stop them from doing so.  And even if you're right about game streaming taking over by 2030, we'll probably have a new generation launching sometime between 2025-2028.  By then we'll have new architectures that are vastly better that will be getting cheap enough for it to make sense.

I think moving to a new architecture is also pro-profit, though.  The Series S is cheaper to manufacture than the One X (that they had considered potentially keeping around instead), for example.

I don't think the PS4 still being around two years later is just PS5 availability.  The PS1 stayed around for years after the PS2 came out.  The PS2 stuck around for years after the PS3 came out.  The PS3 stuck around for a time after the PS4 came out.  So, if there's no alternative budget system at the PS6 launch, why wouldn't Sony keep the PS5 around for a while too?  Not only have they not dropped the cost of the PS5 Digital, they've actually raised its price in most countries.  That price increase is not going to help them retire the PS4!  :)

At launch? Doubt it. I think we're talking about two different strategies here. MS main goal is to spread gamepass to as many customers as possible at any price point, hence why we have series S in the first place. Also it wouldn't surprise me if an additional MS' plan for the series S was to create a base platform for their future XB handheld (if AMD manages to create low power SoC with the same specs. It'd be much easier to achieve than to have series X / PS5 handheld equivalent) to spread gamepass to all of those handheld lovers (mainly in Asia) and realistically starting to compete with Switch and Steam Deck.

If I have it right after the PS4 Pro launched in Japan a bit over a quarter of PS4's sold there were that model and I doubt it was drastically different from that worldwide so I'd consider that successful. For the One X I remember Mat Piscatella saying it sold well. 

They aren't as far behind but will still become low end hardware later this decade so won't be capable of 4K in an increasing number of games in the coming years which would make a more powerful revision needed for 4K in some future games and also needed for improved ray tracing since neither console is good at that.

The cost part could make it tricky though.

Somewhat...

I feel like the ideal solution with be upgradable hardware and start with a $399 machine, that can be upgrade to a more powerful box from the get go

Sorry but you are wrong on this.

A new architecture is more costlier to manufacture than the older one at the time of launch. MS is losing money on Series X and even more money on Series S, while Sony is about breaking even with PS5 and losing money on the digital version. Meanwhile PS4 is sold at profit for a long time now and didn't got pricecuts on the late life making the reduction in cost bring more profit on it.

I'll say again to you, the reason the systems are still manufactured and SW released for the older systems well into the gen is profit. Even on the other discussion we had you got it backwards, it isn't that Sony keeping the system under manufacture (even if in small quantity) that keeps the support of SW going or any mandate on it, it is just that the sales of SW on the older gen is still high enough for them to keep supporting and since they make profit on the older HW (which being discontinued wouldn't really open space to make the newer one since it is a different manufacturing process) they make it.

The sole reason MS discontinued Xbox 1 was that it was selling poorly and SW likely had dwindled a lot faster than PS4. This happens every gen, Sony keep manufacturing and supporting the older system longer than MS and Nintendo because the success they sustained on those systems allow for it to be alive longer.

I predict Sony will move forward with a single SKU and its digital only. Disc drive will be add-on from now on.

Easier to manufacture just one, and less confusing for customers.

I don't think so. The most I could see Sony doing is a two-SKU approach that they did with the PS3. Perhaps they'll be a cheaper PS6 with less ports and 1 to 2 TB SSD and there will be a more expensive one with more ports and 2 to 4 TB SSD.
I don't think we'll get the digital vs. standard SKU separation that we got with the PS5. The detachable disc drive rumor is pretty likely, and I could see PS6 only being digital out of the box. They'll probably sell the disc drive separately. Heck, I think the PS5 Slim will be digital-only with a detachable disc drive sold separately.
PlayStation home consoles (with the exception of the PS3) have been the dominant ones. Yes, the Switch has outsold the PS4. But the Switch is in a weird category where it's a hybrid and indirectly competes with both the PS4 and PS5 during its life. PS1 clobbered the N64, PS2 destroyed the GameCube, PS4 annihilated the Wii U, etc. Xbox has usually lost to PlayStation as well. The bottom line, Sony doesn't need to. Microsoft needed the multiple spec approach, though.

"Sony shoud do 2 SKUs, to offer a cheaper alternative, with different options"
"No, the PS5 Digital Edition doesn't count"

Okay