The problem with consoles would be profit margin. It costs Microsoft and Sony too much money to properly implement a hardware setup that is not only cool and quiet, but also powerful enough to compete in a few years time compared to PC.
But you know what, that's not really the issue IMO. The issue is when the game consoles went from being just a game box to doing everything. They essentially became low power PCs to go under your TV and be controlled by a controller. All the underlying features hog up power. SNES when it came out, N64, PS1, whatever when they came out had one thing to do and one thing only. Even back then compared to PCs they were exceptionally slow but still extremely fun. I think the idea of gaming is stronger than ever, but the purpose of it has pretty much lost meaning. The newer generation leading the pack with sales dictating what comes out is really pushing in the wrong generation. There is nothing wrong IMO with the progression of graphics, but when graphics takes precedent over fun factor is when you start having issues like what we're seeing.
Just my two cents anyways. And that's coming from somebody who loves the leading edge in graphics. But as of right now, I have more fun playing older games with better gameplay and the Wii U that to me is just fun.