Here's a thought: The cost of the game is not dependent on what what is the bare minimum needed to make it. The cost is determined based on the question: "How much money can this game make?"
If the games market keeps growing, then the games budgets will keep growing.
Let's presume that the best xMass FPS release will make 500M$ on playstation.
If I knew you were making a good game for 10M$ which "win" that market, would I not spend 110$M for a slightly better game? Would it not be worthwhile to spend another 50M$ on marketting, etc...?
That brings me to the conclusion that AAA game budgets will always be a factor of: How much money can I make vs. What is the risk?
Indie games will always follow their own rules though.
Just as a metaphor:
Have film budgets gone down because digital cameras/prodcution are cheaper? No: James Cameron has started designing his own super expensive cameras (millions of $$$ each). Why take up this ridiculous endeavour? Because each of his films can make a billion dollars.
You can see the same happening in YouTube. Even though video production started out cheap, once people started making a little money ($100k), the production budgets went up. I would guess that successful you tubers have the same production budget as a cheap "local news" tv show.
You can see the same happening in the mobile app store. You will not see a lot of "flappy bird"s hitting #1. But because the market is still smaller (revenue wise), you will not see alot of AAA budgets either.
So I think that new technology brings the possibility of cheaper products, but a bigger market will *necessarily* mean a bigger development budget.