There is still plenty of life left in the PS3 - It's just that game devs dont take full advantage of the hardware.
I'm really sick and tired of hearing this. It's been 5 years FFS. Stop trying to squeeze more out of the same hardware and refresh already. Yeah, maybe if they keep the same console for another 5 years, memory management techniques and clever optimizations will increase texture fidelity and and improve polygon count by 10-20% but how many people would even notice? Is that all that exciting really?
I see absolutely no reason consoles shouldn't be refreshed as soon as yesterday. A Radeon HD 5000 series or a GTX 4XX with a nice IBM QuadCore in a dedicated console environment would be the biggest generational leap yet (obviously because they've waited for so long) and it needs to happen already.
On the other note, I agree with you. 50 million units sold is definitely not a flop, but in all angles of observation, they went from being in 1st place to last place. Now with rumors of their next console being geared toward casual gamers (guess they're taking a page from the Nintendo playbook) and not significantly more powerful than the PS3, I'm actually hoping Microsoft will have the balls to put all the hardware everyone craves to see when they look at the spec sheets of upcoming consoles in their next attempt.