Actually, I almost agree.. I don't think consoles will disappear, but their market will shrinks as tech goes on and new business models become possible.
Just my ignorant opinion, but as I see it, gaming consoles, PCs (HTCPs) and TVs themselves are all going in the same direction, trying to be more than what they are for a richer and wider experience and audience.
TVs now are Smart TVs with internet connection and a lot of streaming services to offer, USB I/O to play media from HDDs etc,
HTCPs (not preassembled shit, I mean custom HTCPs) want the place taken by gaming consoles fixing all the "negative sides" of desktop PCs, starting with size (micro and mini atx), compatibility issues (a lot harder to have now) and STEAM is there to make everything faster and easier.
Gaming consoles started from an advantageous position being part of the "gaming in the living room" culture but they had to offer more to keep the place under the TVs, with the same services we can find on TVs and PCs (Twitch, Youtube, things like that), paying attention to details like user friendly OSs, accounts system for more devices (well, not Nintendo..) and social craps because they have to look like devices that can offer more than simple gaming, they need to take the center position of the living room.
It's more or less what happened to portable consoles, when smartphones took a huge slice of consumers. It didn't happen because smartphones had better games, right?
Maybe they will all stay like this and to complete one another, but if they don't, it looks inevitable to me that one or more of this evolutions will fail as they can't suvive all together at the same time.
I don't think Sony and MS are spending so much over server infrastructure just for the present day, it's a long term investment. PSNow and MS's service could be the next big thing, with or without a physical console under the TV.