You've misread me - I said that the last two DID use FMV as an argument. The others didn't. I didn't take the Enchant Arms all that seriously. At this point in time, and with the timespan they had, I didn't consider it all that likely they would really need it, and FMV is expendable at this level. Of course they cann manage. The question is, at what cost? I have said before, sometimes having restrictions forces you to do a better job.
The original Xbox already had a similar problem against the PS2 in that there was no DVD playback by default, so unlike in PS2 games, the Xbox versions couldn't use it for in-game cutscenes. N64 games were limited in that also. Were they worse off? Sometimes.
For the 360, it should take a little while before it starts to count - certainly for FMV you can do a lot with decent encoding. But, as I've said before, extra capabilities can and will be used. The option to be able to use 54gb is and will be an advantage. And several reputable developers have indicated as much. They may be proven wrong, but we will see. Oblivion could use procedural synthesis, but recreating other types of landscapes won't work nearly as well, especially existing locations, cities like London and such. And if you do use that technology, it still costs processor power.
We'll see what happens.