The thing about the diminishing return on graphics, is its graphics and power per cost. Sure developers are going to want more power, but can consumers afford those machines? One of the walls that was hit years ago was processor speed. As it turns out anything above 3ghz turns your processor into an oven, so the move was made to make multicore processors. They just stack processors, what really needs to be done is researching specified algorithm cores. cores that process a certain type of information really fast and really well. Like for instance encoding video is done at a slow slow speed on my general multicore processor, but apparently a ps3 can encode/decode video formats in lighting speed x2. The more different things a processor can handle the more efficient data management can be. Ps3 processors could be made to do anything with the right programming, but general processing programing is more difficult then throwing numbers at a smart core.
Also, more ram, thats always better.