But then look at games like Fortnite which aren't graphical juggernauts either... Maybe the saying availability is the best ability is true and being available on as many devices as possible is the key to sustainable revenue for these companies.
Fortnite UE5 edition on Switch is currently experiencing what every other switch port is experiencing. Severe graphical downgrades to meet hardware requirements.
While you're right that it helps to be on every platform for sales reasons, that doesn't coincide with the visions that developers have for their games. They're wanting to create what they picture to themselves as artistically and creatively 'the best' for their audiences, while trying not to be completely kneecapped by a lesser platform. You can't make a game like Red Dead Redemption 2 on Switch without massive downgrades. It's a tightrope they have to walk and the best way they're doing it is by optimizing the graphical capabilities of 'low' and 'medium' settings you would see on PC to make sure they look as presentable as possible. Whereas in the past, 'low' and 'medium' meant either 'textureless blobs' or 'textureless blobs with slightly better lighting'.
One of the issues here is that many people here don't see the actual graphical progression in games like Fortnite or Cel-Shaded games like Hi-Fi Rush, so they have the naive thought that Hi-Fi Rush is on the same level as an emulated Jet Set Radio because they're both cel shaded. So they also think that Fortnite from 2011 is the same as Fortnite from 2021. It's not.
Also, like stated, no other console can do what the Switch is doing right now. To add another reason onto this, if MS and Sony decided to do what Switch does, PC would pull way, way ahead graphically, and then that would bring death much closer, much faster, to both HD consoles. It's a lose-lose situation.
We have a long, long way until we actually plateau. Right now, devs are still using essentially graphical 'magic tricks' to trick players into thinking their game looks amazing at all times. An actual full plateau means full ray tracing/path tracing capabilities, at 8k, possible even in VR(dual 8k displays) with extremely high resolution
varied textures(that can be viewed at the closest and farthest of distances without a drop in quality), fully interactable and enterable houses and cities with zero loading screens with A.I. routes and programming on a level that's much higher than anything we've ever seen in Red Dead Redemption 2(which was great already), all running at 120fps or more, maximum AA, all realtime, all the time at anywhere and anytime in a game.
That's a full plateau. That's when things will truly become interesting, because then all that's left is full creativity.