The only way it makes sense to develop for a 7 year old console is if you want to reach the widest audience possible and make the most people happy.
Sorry, guys, there are still more Xboxes out there than PCs capable of running Rage. Of course, right now it seems like no PCs are capable of running Rage.
Skyrim will be terrible at launch, too, but Bethesda has far more experience in fixing it up quickly.
Any surprise, now, that Skyrim stuck to its own engine?