Even Crytek's Cevat Yerli stated that "the 360 and PS3's CPU and GPU are more than adequate for a port of Crysis, it's more a of a memory issue."
And of course Battlefield: Bad Company is coming to both consoles and it has destructible buildings, procedural at that fact. Both being a steady set of hardware to develope for, it's easy for devs to make use of both systems as compared to PC developers that have to make a game scalable for a wide range of hardware, as many PC titles as there are out there, only a select few actually make what I would call "full use" of PC hardware, instead of losing alot of efficiency in wasted operations that otherwise could've been used for the actual game. Games like HL2/Source games, Far Cry, Crysis (it's "requirements/recommendations" are "high", but the game is extremely efficient for what it's doing all together), Call of Duty 4, and some others all make great use of the hardware they are running on. Not to mention all those games will run on hardware below the required specs, hell Far Cry will run on Intel GMA 845 (aka Intel Xtreme Graphics 2), albeit the GPU will actually fail to render the entire scene, but it runs never the less, I beat it like that on my old Toshiba Satellite series tablet PC haha.
The next real step with games I think is interaction, Crysis was/is the beginning of this, so I think we'll see more emphasis on CPU and memory and more instances of GPUs being used for real interaction physics (not effects physics). Sure theres is more graphical output to be had in some games, but shaders also do wonders in games too, however, environmental interaction is the next big step in producing life like games.
I agree with woundingchaney though, memory is the biggest issue involving environmental deformation, the current consoles really don't have too much to work with, but they do have HDDs for data caching, which is no real substitute for real RAM but it definetly helps, just ask the guys at Insomniac or Naughty Dog. The Wii though I think is possibly the most properly equiped console in terms of memory as compared to it's other components, however the overall title goes to the PSP. Too bad they would just have a difficult time with high level procedural interactions, but you can still do a good job with scripts like in Red Faction 1/2.