Odd I used to be on the other side of this debate. I am very happy with this gen esp in visuals. But the medium does need to progress.If a console stays too far behind PC's will take over. Tech needs to improve now whether or not consumers are ready when console makers are ready is another subject. I still just love the visuals on WonderBoy in Monster World. I still love Alex Kidd visuals on MS. I still love Shenmue visuals. No matter the era I'm still impressed. But tech can limit art design. I said this on my forum but feel Darksiders II was limited by the consoles of some of the design that could have been in a few areas esp the first. I love my 360 and still want a PS3. People last gen were more than happy with what PS2 can do and pointed out games like God Of War II,Resident Evil 4 & Chronicles of RIddick. Then new consoles come and people are ready all the sudden. Personally consoles should not end their cycle until there is no more to squeeze out like the rolled up toothpaste tube.
From a marketing standpoint, sure, it all makes sense. If they want to keep making money, they have to eventually have new hardware, obviously.
But purely in a technical capabilities capacity, I can't say I agree.
As consoles are now, there's almost nothing that can't be done through the use of smarter development techniques. The tech itself isn't limiting anyone on their art design right now. PS2 and before, I might agree to an extent, but when you have current games that look like Uncharted and FFXIII (and now looking at things like Ground Zeroes), it's clear that no one is limited by the tech; it's just a matter if using that tech in better and smarter ways, which most devs aren't doing.
You use Darksiders 2 as an example of being limited by the consoles it's on, but I don't think it's a very good example, considering the game isn't exactly the pinnacle of what's out there right now.
Darksiders 2 is limited by its budget, the capabilities of its programmers and designers, and its development schedule. Nothing else.
Given more time, a higher budget, and more inventive programmers, and the game could likely have accomplished everything you think it should have. It's not the fault of the hardware it's running on.
I agree that a console generation shouldn't move on until everything is squeezed out of it, but I don't think everything has been squeezed out of this one. There's still much, much more that can be done.