The hearts of people expecting PS4 to be some techno core beast and the next Microsoft machine to be a Wii.
Who wants that?
The best scenario is for both to be, if it raised the chances of a higher baseline that pubs target and leads to more ambitious games.
If two companies go high end, that's a good thing if you're interested in third parties taking more advantage of a bigger leap.
If two go relatively low end, it's a bad thing for the above.
(Assuming two high-ends can muster a market large enough for third parties to focus on it, of course)