And I suppose that your 286 runs VisiCalc "just fine thank you very much." ;-)
Software expands to fill all available hardware capability. It's a given. More resolution, more triangles, more and larger textures, more colors, more hardware-generated effects, more bump-mapping, more anti-aliasing, more fog/smoke/particles, most light sources, more reflections, more shadows, more "mores". More realistic opponent AI will suck more CPU, making geometry acceleration more valuable. Don't get me started on far out stuff like real-time ray tracing...
Re: Resolutions above 1600x1200 - Flat panel prices will continue to fall until HDTV resolutions and higher will be available. And what about stereo displays? There is literally no such thing as too much resolution IMO.
Until we are seeing "Toy Story" (or better) quality images at 10x today's resolutions, there is always room to improve.
Coming (slightly) back down to earth, current games are limited to either mostly indoor areas (with high polygon counts, curved surfaces, and high rez textures ala Quake3) or large outdoor areas (with low poly counts and other limitations ala Tribes). Large high-rez outdoor levels with multitudes of players (ala Everquest) may be the next big thing. I know the Half-Life guys already stress the CPU more than Quake does. The gameplay in Team Fortress 2 screams for large, realistic levels with may push todays hardware. I suspect tradeoffs will be made for TF2, but probably not for TF3(!).
I'm rambling but my main point is that software (and games) will always be limited by hardware.
As far as who is writing this into their games? That answer is easy: no one. The real question is "How easily can the current gaming engines be adapted to these new capabilities?" I'm fairly confident that id (and others) have designed a fair amount of extensibility into their latest engines. Remember that Carmack is on the Technical Advisory panel of the major chip companies.
Chip
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