I still think applying the concept of rolling generations to the console market is ill-conceived and that having defined product families where new, upgraded designs can either become a part of the existing family or will instead be the start of a new product family is a better approach. Not looking to argue that here, though.
Sure it makes sense for the console maker in order to move new hardware, but makes almost no sense for a 3rd party developer.
Now envision the scenario that MS is likely moving towards. The Xbox, just being a cheaper alternative to a PC with a more limited scope and one where they control the store.
In such a scenario, MS would "in theory" be able to always push better graphics then the competition (make the best version of a "MS exclusive" run on the top of the line PC hardware available, then scale that down to the Xbox with similar specs to the competition) if they desired.
Meanwhile, they'll also be able to address all segments of the console market at all times. No need to wait until later in the generation for that cost reduced "slim" model to attract more budget conscious buyers.
No more resetting of generations with a potential fall-off in software licensing revenue and then having to recoup that later in the generation when sales finally take off.
3rd parties being less at risk during generation transitions as they're always targeting the latest hardware (PC with only light modifications needed to run on this hypothetical PC lite Xbox game console). They can still target the console first (less hardware needed to test for QA) while using whatever level of assets from the "uber" version of the game is appropriate for whatever level of console they are releasing on.
Imagine if MS had the balls to become the graphics pushing publisher analogous to how Crytek used to push the PC. Always push the envelope on PC and port what you can to the console. Only in this case, they know what the consoles will contain ahead of time and so can have their studios tailor the engine to be more friendly towards that (not limited by it, but not engineered in such a way that you can't easily port it to those consoles).
In such a scenario, even if the next console doesn't feature RT hardware, they're already prepared for console level RT hardware because they'd have been pushing it on the PC versions of their games.
Regards,
SB