360/PS3 had jumped the gun and under delivered at the same time when it came to graphic hardware. While they did anticipate the move to 720p/1080p, their machines were underpowered or very poorly designed for the job. Sure they look good next to the Wii since they could output in a higher resolution and now everyone is packing an LCD, but that "Advantage" had cost them dearly.
Now that 1080p is now the de-facto standard for the next decade or 2 with 720p as the floor, graphical gains are going to be marginal coming into next gen. Given the costs considerations, development costs, technological progress and the ability for the average human to even tell the difference, next gen consoles won't be that much more powerful than the WiiU without blowing the bank or having the only people who would notice be the pixel counters. MS can afford to break the bank, but Sony has no chance in hell considering how poorly the company is doing as a whole and the state that the Vita is currently in with no end insight.
720/PS4 will be more powerful, but it won't be the mine blowing large gap it is today. Even on the high end PC scene developments have been sluggish. There are only a handful of games that remotely push those computers and they do it pretty much out of brute force like having absurdly high resolutions or having having some very nice but expensive effects that can be done cheaper with marginal impact.
If
this has any truth to it, MS is looking to sell you a locked down, striped down PC in the future.