"... a $150-200 media center like Apple TV with no gaming capability"
I think "media centers" in the form you speak of are becoming more and more irrelevant with the emergence of smart TVs and those <$75 HDMI sticks that are basically fully functioning computers.
I can already stream video from my phone directly to my TV, which gives me full media center capabilities in a very convenient package. I can't see the average person spending $200 for such a device given the current alternatives.
"Personally, I see his point that the price expectations of game consoles prevent them from effectively running next gen games. However, that's always been the case, with console gaming quality lagging behind PC equivalents. But maybe the advancements with VR and 4K this time around has finally broken the traditional console refresh cycle?"
I agree with your first two statements, but I feel like people are going to really reject a refresh cycle of less than 4 years. So rather than VR influencing the life cycle of consoles, I feel like it will be the other way around (but maybe a little of both). The pressure will get pushed all the way back to the component manufacturers, forcing them to make GPUs capable of VR for a lower cost. People have been spending ~$400 for a new console every 4-8 years for like 30 years now, so there's a lot of momentum behind it.