That said, yes, it seems Sony is winning this generation in consoles. But I would claim it's due to other factors than PS4 as a piece of hardware and OS.
The reason the hardware is important is because games like Uncharted, Last of Us etc (which are system sellers) stand apart from the likes of Witcher 3 because of the ability to use the superior hardware to product superior graphics. I would argue this is just as important as the game play. But again not for all games just these specific type of games.
Yes, PS4 has a slightly better GPU but even if PS4 and Xbox one shipped with hardware where xbox one was slightly better it would not affect the current market share that much.
Up to a point superior graphics are created by superior artists and animators. Using engine and art assets by superior programmers.
Uncharted is so good because of Naughty Dog, not because their platform happens to be PS4.
Sony has played their part well, whereas Micrsoft fumbled the Xbox one launch and positioning.
Now I don't know about The Witcher per-se but there have been a good number of multi-platform releases where performance and fluidity were compromised on XBox One.
And it doesn't just seem to be Sony, the numbers say it's Sony (especially in Europe). General consensus is that Microsoft severely botched the launch of the One and has been left to play catch-up since.
It's never been the case.
The GC was the most powerful console of its generation, the PS2 was by far the least powerful one (with the possible exception of the Dreamcast, not quite sure where that one was).
I'm not saying it was a supreme machine without limitation, I'm saying it was the most powerful one. It had by a fairly large margin the most powerful CPU and GPU subsystems.
That doesn't mean there were no tradeoffs, it was all strength and it was necessarily trivial to make use of that power. Think PS3.
So, I disagree with the first claim in your second paragraph, but my pedantry only supports your main point: PS2 won, selling 3 times the others put together. But PS2 was a long way from being the most powerful.
But, both as a developer and player, and purely subjectively, I do think XBox was the 'best' of that generation.
That's not true. The Xbox was far more powerful CPU/GPU-wise, and had far more storage (the 8 GB HD was pretty amazing) so games could install themselves to HD and use virtual memory to increase their performance.
Hyper Light Drifter is one of the most beautiful games I played to.
For me the Switch looks powerful enough to run beautiful games. A good art direction trumps raw power in almost all cases.
If the Switch is significantly underpowered compared to the competition, it means that developers won't be able to easily port XBone/PS4 games to the Switch which will hurt the Switch's lineup. In that case, Nintendo's best hope for success is that their Blue Ocean Strategy will take off and people will treat the Switch as not just another console but as a supremely versatile handheld.
The reason the Wii got away with it was a) Blue Ocean Strategy gave it genuinely unique games and b) the PS2 was still kicking around so the Wii version can easily be ported to PS2 and sell on twice the number of consoles (i.e. they'd make a 360/PS3 version and a Wii/PS2 version).
The Wii U had beautiful games with beautiful art direction (Yoshi's Woolly World, anyone?), but it still flopped largely because third parties ignored it and Nintendo didn't have a good enough Blue Ocean Strategy.
Sony is dominating the high end, exclusive game market. The Last of Us, Uncharted, Metal Gear Solid and coming up in 2017: Horizon Zero Dawn, Death Stranding etc. All of these push the console to the limits and show just how superior the PS4 hardware is over its competitors.
Nintendo isn't really suited anyway. Their games are arguably better cel-shaded and cartoon-like. And so why not appeal to the less hardcore, graphics obsessed gamers. There's far more of them after all.