In the end it would mean if you want to play the latest new games you will need to upgrade every year. Being stuck for a long period of time is good for the industry, (7 years yes is to long) it improves quality, if developers know they getting better hardware the next year, they will never need improve performance. Just compare what games looked like at the start of the xbox and what the xbox can do now on the same hardware.
I doubt you would have to upgrade yearly, if you are required to do so I think a more realistic view would be bi-yearly upgrading + the Ouya costs very little (~$100)