You are absolutely right that things look very differently when you extend the timeframe and that the potential of the hardware increases significantly over time. That doesn't mean, however, that we all need to get carried away with excitement, nor that it's going to be a success regardless.
One may wonder, for example, why you'd even need to buy a game from Apple in 10yrs time if you can just run it from the cloud and, if that's the direction of travel, established players like Sony or Microsoft may have a significant leg up with their established platforms, games libraries and studios to produce good original content.
On the other hand, if local remains the primary way to play these games then a more capable phone will have an advantage. That being said, games will likely continue to take advantage of more capable 'desktop' hardware and so the question will remain to what extent mobile gaming will lag behind.
I think it's also worth remembering that while genuine AAA games have been out of reach, your average phone has been capable of playing more sophisticated games for years and, with some notable exceptions like Genshin Impact, Call of Duty: Mobile and PUBG, these aren't really the games that a lot of people play and there's probably a reason for that.
Anyway, I'm equally excited and sceptical but probably wouldn't buy a AAA on the App Store anytime soon.