Why are folks still taking this news to be an indication of Sony switching away from the traditional generational HW model, to one of iterative HW with forward and backwards compatibility?
It may well be an indication towards that but its by no means conclusive. I can still see PS5 launching in two to four years time being fully BC, but not allowing PS4/4k forwards compatibility. That's far more ideal in my mind. Forwards compatibility is the devil. The whole idea sucks. Forwards compatibility between "stop-gap" iterations like the PS4k is fine, but only as long as a substantial upgrade comes along later on down the line and provides a new, fresh baseline for devs to target.