Hope they're taking a hard look at their competition. They can't afford to under power it and have the competition's momentum take them even further with hard specs and support. Splurge on the RAM to make it an adequate multitasking entertainment machine.
The PS1 and 2 were technologically weaker, yet still were the victors of their generations. If the Orbis is reasonably close enough to the 720 in spec, it really doesn't matter. It comes down to developers who understand how to utilize those innard bells and whistles of hardware. Nintendo's 3DS is inferior to the Vita in many ways, but a developer as skilled as Capcom (takes the time to understand what makes 3DS tick), makes the handheld sing in ways you wouldn't believe.
I believe the power of Obis/720, will be indistinguishable when looking at the games side by side. You'll have certain games, which can pull off things on one system, that the other doesn't do as well (think fur rendering GCN vs. XBox 1).
I project that this upcoming generation will be decided by value placed on the systems by their publishers (incentives like PS+, Live infrastructure) and first party exclusives. In any case, my eye is on Sony, as they have a bigger opportunity to surprise me as a gamer, than MS. I feel MS is just going to have a brute strength machine, an extension of current 360 - with no real individuality/identity. Hence my disinterest, even as a sole 360 owner.