Lets look at this a little closer...
No, I get
why the game looks worse on 360 from a technical standpoint. But as you said, they are one of the biggest RPG developers, and using multiple discs is not something unusual for this genre. Lost Odyssey, which came out 2 years ago for 360, was on 4 discs. Given that the fairly linear progression FFXIII has, I personally see no reason why they couldn't have used 4 discs as well. Using 4 would give them ~28GB to work with. With it being said that the BD version of XIII uses ~37GB, only having to compress the game down ~9GB instead of ~16GB is a big deal.
I don't want this to come across like I'm saying all developers are lazy. That isn't the case at all. They have limited budgets and limited time, so they do what they can. But, given that FFXIII has been in development for such a
LOOONG time, the process to get it on 360 was practically an afterthought. So, they didn't just slack on it, but to say that the dev process was equal across the board, and the lower visuals are a perfect indicator of anything is a little off, in my opinion.
Like I said earlier, this is the same reason why every multiplatform game doesn't automatically look better on PS3. Given enough time and resources, they all should. With a more powerful system, and 50GB of space to work with, Modern Warfare 2
(or Madden, or Assassin's Creed, etc) on PS3 should absolutely blow the 360 version out of the water. The textures could be much higher res, the audio a higher bitrate, characters with much higher polygon counts.
But, in the real world, where development cycles are short, and budgets are even shorter, compromises have to be made. I agree that DVD is a limiting factor from a technical standpoint, but to use FFXIII as the cornerstone of that argument is sort of sidestepping the real issue, in my opinion.