Long story short, all this technology is unnecessary, and games were perfectly fine 30 years ago.
You know, I detest people who say shit like this. Because they really are out of the loop. Either that, or they are completely lacking in foresight and vision. Which I guess, in his case, he used up 40 years ago.
But there are three things that this new level of technology enables that is absolutely necessary when it comes to the improvement of games, and what games can do.
1) Extremely complex scenes (due to graphics hardware). Lots of game objects on screen allow for new gameplay opportunities.
2) Extremely complex AI (due to CPU power). What some games are pushing nowadays has simply been impossible up until now. And whether it's a single AI that does more than previously possible, or many AI that interact in complex fashions, it allows for new gameplay opportunities.
3) World persistence (due to ram, harddrives). We've come a long way from scenes resetting because they were offscreen. And the more storage we have, the more the game can remember about the game state, which allows for new gameplay opportunities.
Anyway, I thought it might spawn an interesting discussion.