1080p and 720p games both work and look great on HD televisions, it's easy to downscale too, just look how easy one can choose the resolution of their game on a PC, it's not hard.
IMO the PS3 and 360 were fine how they were, they worked for HD, while Nintendo needed an HD console. I think Sony and Microsoft should have waited until 4k TVs and GPUs that could handle 4k became cheaper to make a next gen console then.
Because due to the massive jump in resolution games would have to have on a 4k TV - a next gen console would have been worth Sony and Microsofts time, now by the time 4k TVs are popular (over 40% of households) Nintendo will have the upper hand and release their next gen to be compatible with 4k TVs and Sony and Microsoft will be screaming because they just spent a ton of money on consoles which tehy felt would last a long time and now need to be updated to compete with Nintendo and look good on a 4k television.