Are consoles good for computer game development?

I want to bring this up because I've not mentioned it before on this blog and because with next gen consoles on the horizon I'm pondering whether it's going to be worthwhile to stay with console gaming or go back to PC gaming.

Until just a few years ago I was a pure PC gamer and I always thought console gaming was a bit of a joke for most gaming genres; the notable exceptions being fighting games and sports games. When I eventually did change to console gaming I was so pleasantly surprised how easy multiplayer gaming was and the lack of worrying about hardware capability seemed very refreshing. However, I also became more aware of how much was being cut out of mainstream titles so that they could be sold on consoles.

I find it very depressing to think that newer releases of games such as Command & Conquer, XCOM and Flash Point have been deliberately toned down so they could be sold on consoles. And it's not just like they've been toned for the console release, every version is toned down, PC included. Features which were expected and greatly loved in the original PC only versions have been stripped away so they function on all platforms in a similar way.

This leads onto the next part of my argument; has the evolution of game development been slowed due to game consoles? Game consoles are where the big money is, so all the big publishers develop for them, and because consoles maintain the same hardware for years the developers are restricted to this limitation until the next console comes out. We all know that PC versions of games are generally better, but how much better could they be is the publishers committed all their resources to pushing the limits on a single product, for a single, ever advancing platform?

The counter argument, as I see it, is that consoles have brought gaming to the masses, thus bringing more money into the industry and allowing them to invest far more into developing new games. So maybe without console gaming the publishers wouldn't be as rich and resourceful as they are and so development would be basically as it is at the moment anyway, or worse?

It's an old argument, it was just on my mind. What do you think?