You're confusing devs with publishers.
The obvious drawback is that leaps forwards in technology are artificially stunted if your game has to run on the last gen. Try to imagine how GTA III would have ended up if Sony mandated it had to run on PSone. Or how LittleBigPlanet would have been if it had to run on PS2.
I would hope that MS has a sort of contingency against that, as in always having 1 base platform coupled with one rolling platform.
If they can win over the public with a good policy on the hardware front, I think generation less is a better model as the pros greatly outweigh the cons.
Unfortunately I'll need to make some major assumptions here.
For instance:
a) the argument that cutting everyone over to the new base system means better looking games
* While we know this is true, this is true only after the launch of the generation.
* At the beginning of every generation we still get that cross platform stuff anyway, and we get many folks who write (this looks like my PS3 etc etc)... well yea, that's because it is a PS3 game running on PS4.
* So this transition period is still here anyway
b) Developers can always target lower spec platform, traditionally with generations, once everyone has moved on you effectively stop coding for the older platform unless you want to do twice the work. This is no longer the case for developers who are interested in this. (mainly for indies and smaller games), this is a big win for consumers because your older hardware is not necessarily ever obsolete.
c) Developers have a much longer time to work with newer production harder. So while devs are still trying to get the most out of XBO and PS4, later this year they can already begin their roadmap of developing their engines for scorpio as a baseline. They would know for instance that in 3-4 years Scorpio would become the baseline, so they can continually add and work on features and look at their customer base as when to switch over. We still don't know when PS5 arrives, but if it's closer to 2020/2021 then Scorpio will already be a mature platform with engines fully tuned for it, and the next MS device will roll in.
d) no one loses their library, and your accessories carry forward.
edit: had to change near end of generation, and switched it to launch of generation