Kid Chameleon: Fair enough, but there's only so far that middleware's going to go, and a larger, more-skilled team is always going to get more (sometimes much more) out of the hardware than a smaller one will. The gap becomes even more pronounced as consoles become capable of handling larger, more detailed environments, forcing developers to fill those environments with more (and more detailed) characters and objects for the player to interact with. As you pointed out, art assets don't generate themselves.
So yes, games from large developers stand to look (and possibly play) better than the ones from smaller studios, and yes, this difference is only going to become more pronounced over time, middleware or no. Small development houses are giving way to larger ones as game development becomes more demanding, just as lone bedroom coders gave way to the first game studios years ago. It's inevitable, really. It's about time we reconciled ourselves to that fact.