In rough chronological order:
1) Virtually all reports had the PS4 at 4GB of GDDR5 (3.5GB dev usable) and the 720 at 8GB of DDR3 (5GB dev usable).
A)4GB does seem ridiculous, but console makers always skimp on RAM - remember the 360 was only aiming for 256MB until Epic slapped some sense into them.
B)3GB reserved for the system for the 720 also seems ridiculous, but I don't think this is just OS - I think MS designed the system that all of the OS, user apps, Smart Glass output, (much higher res) Kinect camera input, VR goggles input/output, Youtube/Justin.tv output, maybe even TV recording/forwarding may or may not be active at any given time, and designed with a large pool of slower, cheaper RAM accordingly.
C)Supposedly Sony has recently upped the RAM to 8GB to match the 720, but 4GB more of GDDR5 vs. DDR3 is much more of a financial hit.
2) PS4 is almost certainly has no BC. PS3 managed it early on by simply including the PS2 processor, but trying to include Cell in the PS4 would be a technical nightmare. (You have to feel for guys like the Guacamelee devs - Sony has basically told them "You need to finish and entirely sell your game in the next ten months, because at that point the majority of people who would buy your game will have switched to a new system.")
3) I fully expect there to be more generations of consoles. However,
A)I expect the gap between gens to run even longer - I wouldn't expect your 1080 until at least 2020.
B)Physical media will still be an option even then. Massive chunks of the world don't have the technology / business models to support today's game sizes, much less 2020's.
C)I still am doubtful of the impact of the Steambox this gen. As already stated, they have to get around Windows emulation (though porting over OpenGL PS4 games is intriguing), and the array of third party Steamboxes they are evangelizing now is entirely missing the point of consoles (being able to code directly for one lesser cheaper hardware spec for better results).
D)Smart phones continue to gain strength, but they aren't taking over before another generation of consoles (so 2020+). Game image size (not to mention getting that image to the phone), battery life, heat dissipation, etc. are all much bigger issues than you realize. And the biggest issue: UI. Secondly, while the Epic/Chair stuff is impressive, let's remember that resolution is one thing; geometry is another. Note how few character models, particle effects, amount of world textures, etc. you actually get in Infinity Blade.