In absolute terms I would disagree; compare the differences in poly counts between the 360 to the Xbox, and from the Xbox to the Dreamcast or Saturn (your choice).
But clearly in terms of what the average schmo can obsess over, it doesn't seem as big a leap as going from the NES to the Genesis (or the Neo Geo if you want to be a REAL HOT DOG!), which I guess puts you in the Wii camp
Market saturation might not be such an issue with Microsoft and Sony busily duking it out in the stratosphere during a recession. Just as netbooks are the one bright spot in the computer hardware industry (according to Intel and agreed with by many), low-cost entertainment computers may be a growth industry in these years.