Umm... Good?
I'm apparently in the minority on this, but I don't want any generation of consoles to be "cutting edge" technically. A few points causing me to feel this way:
1) I'm perfectly fine with the graphical standards of current gen games, which makes any improvement more than adequate for me. And even though the tech won't be top end, it's still a significant improvement over what we have now, and with what we have now being fine, so is that.
2) Cost. This is pretty self explanatory really. Cheaper parts means better profit margins, and profit keeps people happy. Also, higher profit margins leaves more room for potential price cuts, spreading the benefit to the consumer. And it applies to the developers as well, keeping the bar low gives the non "super studios" a chance to stay in the race. The higher the tech, the bigger the budget needed to stay competitive.
3) Game Quality. This can be a bit hit and miss depending on all kinds of factors, but generally speaking my impression of the first year or two of the current gens life cycle was developers constantly expending god knows how many resources purely on trying to one up eachother on technical accomplishments. Making things prettier and generally just trying to "catch up" with the power of the system at their disposal.
When you're using older tech, that situation doesn't exist. Rather than trying to constantly upgrade your development process, you can focus on making the game you wanted to make. Optimizing engines that have already peaked, working with resources that people have been working with as is for years. In other words, less time developing the means to develop, and more time actually developing.