The whole hardware upgade thing has really slowed down I think, at least with graphics cards, I upgraded 18 month ago just before new cards came out and you didn't get any more for your money, now new one's have come out again and benchmark make them look like old cards rebranded.
I can play more or less anything on maximum settings apart from Crysis and the new cards are not exactly running that perfectly.
True-ish.
The top end cards now are utter monsters, that can run crysis easily.
But what £200 got you 18 months ago, 150 gets you now, more or less, and thats pretty new in the graphics card industry.
Before I got my 4890 (I have 2 really, but in different computers, not crossfired) I was getting a new 150-200 card every couple of years and getting about double the power. Now I'd have to spend about £400, and I'm not going to!
besides, if games start looking any better I'm going to get comfused and start thinking that I'm playing films. Devs need to start kicking out good new games, not good new engines. Theres a difference.
The big reason I think that the PC hardware demands are, if anything, getting lower, or not much higher, is that everythings made to be cross platform, and poor little baby x-box and ps3 hardware just cant keep up with a modern PC, but they can make games look great, so theres no point (i.e. no money in) making a game that fully exploits current PC hardware, and therefore pushes the hardware on.
The last game to do that was crysis, and because crysis 2 is going to be released cross platform its hardware requirements are actually (well, reportedly) lower than those of crysis.
One game series I quite like is supreme commander, and that already happened there: Supcom and its expansion packs were PC. They look amazing (even now) and they're extremely complex games. Supcom 2 comes out cross platform and because of the limitations in hardware and interface of consoles it plays on PC like a cartoon tutorial for Supcom 1. Happened with a few other games too.