Games become more visually complex as technology increases. More visually complex games cost more to make. Therefore, increases in the power of consoles cause game development costs to rise. For evidence, take every generation of consoles ever. The fact that this isn't an SD to HD transition isn't relevant, so long as there's a discernible increase in graphical complexity (i.e. until we reach a photorealistic plateau) the law will hold.
Middleware does have an effect of mitigating these price increases, but it's not much, and middleware developers have an incentive to increase their prices each gen to reflect their increased benefit. This is why the only developers we're hearing screaming "MOAR POWER!!1!!" are Epic and Crytek; they make most of their money from game engine sales, so the bigger the graphical leap the bigger their profits. The rest of the games industry is most likely quietly lobbying Nintendo, MS and Sony for a more modest graphical boost, because they don't want to see their budgets run out of control, which is why an awful lot of techies are going to be pretty disappointed when they find out the real specs of the next-gen consoles.