My view has been that the PS3 and 360, in an attempt to "future-proof" themselves and distinguish their graphics capabilities this gen, have alienated the majority of the market and jumped too far ahead of what consumers are willing to spend relative to the consoles' perceived value.
The PS2 was the perfect console, at the right price, and at the right time. It was apparent in 2000/01 that 1080i HDTV and 5.1 channel surround were the future. It was also apparent that DVD was mainstream. The PS2's graphics were an order of magnitude better than anything seen before it -- no gamer, casual or otherwise, could walk into a Best Buy and see Madden 2001 on the demo, and deny that that was something they needed to own.
At that point, the barrier to HD entry had finally gotten pretty low. 40" and larger rear projection HDTVs, and 30" and larger CRT HDTVs (either offering 1080i) were hovering around $1000 USD, a 5.1 surround system could be had for under $100, and the PS2 had DVD built-in, which was becoming an obvious necessity and the standard format.
16:9 1080i TVs represented a profound advancement over 4:3 SDTVs. Today's 1080p is a more difficult sell. Where I think people take issue with this gen is the concept that what they just bought no more than six years ago is now outdated. I understand keeping up with technology and the cost of doing so, but we're approaching a level of absurdity with 1080p LCD TVs and Blu-Ray/HD-DVD that the average consumer just does not appreciate, at least not yet.
In my clique, off the top of my head, I can name five guys who owned the PS2, and another one that owned the original X-Box. Today, four of those six have purchased a Wii this gen, the other two want a Wii, while one has also picked up a 360. Wii-tech perfectly compliments what many of us have just redesigned our living rooms around over the last five years, without representing a rip-and-replace mentality that everything we own is already outdated.
I just bought a 46" Toshiba HDTV (1080i max) three years ago. I'm not about to replace a perfectly good and nearly new TV just because it isn't 1080p. Add to that, a game like Wii Sports' Bowling looks magnificent on my TV as it is, as Wii Sports has *finally* justified why a bigger TV is actually better for a video game platform experience (as opposed to just being ... well ... bigger).
// .02