You make a lot of great points Brad, but I thought I'd add a few things.
Mainstream consumers do give a fuck about the resolution of their games. This is more important early in the generation than later on, but rest assured "better graphics" is a selling point for everyone buying these systems for Call of Duty and Battlefield and the other 2 available games, and winning the narrative there is something both Sony and Microsoft care very much about. Microsoft wouldn't have made so many comments on GAF and reddit, or published quite a few articles on DF if it was just for nothing.
There are other factors that are important in addition to the ones you listed, but so far the most important by far has been one that the enthusiast press also largely dismissed: the online DRM stuff.
As for your PS3 comparison, it did indeed suffer with worse multiplatform games a lot of the time. But let me ask you something - how many times, over the years, have you heard the phrase "not only exclusive to PS3, only possible on PS3"? Sony used that like a billion times. They'd show montage of developers saying "the PS3 was hard, but once we learned it, it's incredibly powerful!" They fought the "PS3 is inferior" message very hard to the point where PS3 fans will argue to this day that its exclusive games look much better and that third party developers with inferior games are lazy. Anecdotally I've seen people confuse the PS3 as more powerful simply because it had Blu-ray and the 360 only had DVD.
Point being, the idea that the Xbox 360 was 50% to 125% more powerful than the PS3 never really took off in the mainstream, and that's because Sony fought to keep that from happening, so I don't think the situation is comparable. The difference also couldn't be easily explained back then in a way consumers understood, not as easy as 1080p vs 720p anyway.