Give this man a cookie!
As far as I'm concerned, until "diminishing returns" is proven fact there's no reason to believe anything is different than the past.
In fact personally I've been proclaiming all along that the "next gen" leap if anything, will be bigger than ever. Two reasons: in past generations, high end incremental PC development continued alongside the consoles, "spoiling" next gen graphics before they got here. High end PC development has slowed or stopped drastically this generation though, most PC games are just console ports with a few bells and whistles added if you're lucky. So we haven't had next gen graphics spoiled for us yet, so the leap will be huge the way it has never been in history I believe.
Second reason is common sense, past gens were 5 or 6 years, this gen will be 7 or 8 years. A longer time between hardware means the jump naturally will be bigger just because of time.
Anyway, just look at Battlefield 3 PC footage, if next gen doesnt deliver anything beyond that (and I believe it will actually deliver far far beyond that) it's pretty much a next gen leap right there.
Or lets just look another way, do people honestly believe a console with 4GB, or even 8GB, of RAM, wont deliver games that are drastically better looking than todays consoles with 1/2 GB? It's not even possible, even ignoring the CPU and GPU (which obviously isn't the case).
But the easiest way to tell is just look at this thread, and how the Nintendo fans are spoiling for Wii U to have some serious horsepower under the hood. If it didn't matter, they wouldn't care.