OTOH after 7-8 years they should be able to give us a traditional generational jump without having to go to such extremes.
Exactly. I'm not sure where this doomspeak of "only 1.1x more powerful than 360 next generation, guys" is coming from. The 360 was released in 2005, using 2005 technology, same for Sony in 2006. Even if they were to make the bare minimum of improvements it'd still naturally be a traditional generational jump like you said. There IS quite a very large middle ground between 2005 tech and bleeding edge 2012.
I find it funny that people demand a huge generational leap while a small generational leap will be just as good. The only thing I am looking for is a constant framerate in 1080p and that is something that has been promised this generation but has not been delivered. I honestly do not care if a wall does not have (-super hi-res bumpy/shader/whatever-) textures.
I have played Uncharted 2 and 3. I have played Gears of War 2 and 3. Give me those type of graphics in 1080p with a slight few bumps in AA and less pop-in and I will be fine with everything else. Where are the gamers that always jumped of joy in the 16-bit era because they added new gameplay mechanics? Has it really been that hard to play console games in the last two-three years ignoring the fact that the framerate in some games falls behind?
I've heard this argument many, many, many times. Oddly enough, they happen right at the end of the console generation, where people claim the graphics are "perfectly fine" and they could live with another 6 years of the same kinds of graphics. Miyamoto himself made the mistake of saying Wii-style graphics were as good as he would ever want them.
The flaw in this argument is the fact that the consumer has zero idea of what a proper next-gen game would look like. Compare this with the current generation, with graphics that we are all very well familiar and satisfied with. At this point, the consumer simply doesn't know what they want because they simply don't know what's realistically the look of a next-generation game. If you've never seen better, you can't possibly see how the current is "worse".
Draw the comparison with that of the topic walking about game resolutions. A lot of console-only gamers have zero clue what a console game running at 1080p and 60 FPS looks like. Many claim they can't even tell the difference, but I guarantee you that's not because they saw a side-by-side comparison, it's because they've never had extensive experience with it and can't realistically picture in their mind exactly what it looks like.
Essentially, the "graphics are good enough" is just a fancy way of saying "I have no clue what the next generation would look like". Which is fine, but it doesn't at all mean that we can simply sit out an entire generation. When (not if, when) the industry moves beyond the current level of technology into another one, those differences are extremely obvious. I heard the "graphics are good enough" argument time and time again between last generation and this one. Today, nobody would think that PS2-level graphics are perfectly fine for current-generation gaming.