3D truly is a silly fad.
As for graphics, people need to realize that better graphics don't necessarily equal a better game. Don't get me wrong, I do like it when games look good, but I think people get WAY too bogged down in the technical aspect of it, something which you really shouldn't notice too much when you play a game. I know I don't.
If you want proof of this, look no further than Minecraft. That game I realize is intended to look blocky, but the point still stands. Graphically speaking, the game looks like shit. It looks like something you could develop in the 90s. And yet, look at the player base: Millions of copies of Minecraft have been sold, because it's that great a game.
Actually, if there's one graphical improvement I'd like to see come to the Xbox, it's to fix the washed out, desaturated look that has become unfortunately associated with the system, at least in my eyes. I think Xbox, and I think every generic dime-a-dozen shooter game with gray, brown and muzzle-flash colors. It's boring, hard on the eyes, and completely unrealistic. I recall reading there being technical reasons why this was the case; something about realistic light reflection requiring either a shit-ton of rendering power, or the desaturated mess that everyone went with.
If you want to improve something graphics-wise with the Xbox's next generation, fix THAT. Oh, and coming out with a more original shooter might help a little bit too.