I think that you completely miss the idea of why people want a new gen. Most people want more performance at the same price. For example, 30% performance at $500. They don't want a 6090 that's 40% faster than a 5090 and costs 40% more. Sure, some might buy these, but the majority are just looking for better value for money.
As for playing with settings, sure, you can always do this, and many do. "We" can make do with a 9060 XT. This argument stretches almost endlessly. The point is, not everyone is willing to make that compromise. People have different requirements and different budgets, which is why there are a wide range of GPU models.
This also means that games can't advance. If performance stagnates, so does rendering complexity.
Bottom line, people can certainly live with stagnation. That was the case with CPUs until Ryzen appeared. Arguing that it's a good idea is a folly.