Let's not make straw man arguments. Also, the era of a single console for platform holder is probably over. They aren't making a 700$ PS6 and telling people to get two jobs to afford it. An affordable option will be there, with lower specs.Yes, because the cost is distributed across multiple users. The cost of a console has to be paid for by one player, whereas the cost of a server can be paid for by multiple who time-share it.
Because consoles are still affordable. If PS5 cost $1500, GeForce Now would be seeing a lot more interest. As console prices go up, streaming becomes more viable.
So you are predicting a stagnant gaming space where hardware effectively plateaus with, what, PS6?
Will hardware plateau with the PS6 gen? No, but diminishing returns for graphics will be even more of a problem after it. It will be smaller and smaller improvements until even enthusiasts like us will struggle to notice a difference.