No, he's correct. You want competition between consoles between gens, forcing the manufacturers to outdo each other's tech, pricing, and features. However, during a generation you want a dominant console. You will still have competition, however, it will be between game developers/publishers and not (as much) console manufacturers.
The reasons are simple - it's cheaper, easier, and far less risk to make games for single large install base as opposed to a split market. This is a large part of the reason why we saw such a wide diversity of games over the ps2's lifetime, and had a golden era of both mainstream and niche games... 'everyone' had a ps2, so many games got greenlighted that wouldn't have seen the light of day had the market been segregated.
Your various examples are all over the place and really have nothing to do with the conversation. Bayonetta 2, for example, is a rare/unique situation and really doesn't indicate anything, and besides for all we know if any system had an install base of 100+ million it would have eventually gotten a greenlight anyway. The evolution of online gaming, etc, and all that happens anyway during next-gen competition.
As the gen ends, you then want multiple console makers competing for that dominance the next gen to start the cycle over. During a gen? You want devs focusing all their efforts on a single platform for best results. It isn't 'fanboyism' or hating 'competition' that makes me want a single dominant console, it's the chance of a gaming renaissance such a situation might bring.
A console manufacturer that grows complacent will pay the price. See Sony transitioning from PS2 to PS3, for example. That just means the market is ripe for takeover, and we'd still get competition between gens. This isn't a conversation about 'no competition' vs. 'competition', it's about the focus of competition during different stages of the console lifecycle.
it is fair.
