Well, I think that the current top level AAA games are pushing the 360/ps3 really,really far. Once you really create a game and see with what limited resources (compared to a modern PC) they create amazing looking games (!=amazing gameplay), you will realize, that your assumption is could bewrong. There might be other reasons they don't push the next generation of consoles, one of it will be most likely business considerations (kinect selling like hell, new consoles are always a major financial risk due to the subvention model).
Currently there are very few games that can push the 360 and ps3 which is why we haven’t had a "new" major console officially announced for quite a few years now
Most sandbox games (is there a definition of sandbox games ?) will be hard to develop with one of the standard(FPS) engines and to code a game, even with a hi-polished engine, needs still a lot of coding (game != graphic demo). Most studios, which are capable of building a AAA game, would be most likely able to create their own engine too, but why should they reinvent the wheel when already an engine exists which suits their requirements and only costs a few millions ?
due the releases of major engines (such as udk and cry engine) making a sandbox game with high graphics with out "knowing" code is much more common