The PS3 was Crazy Ken's baby, and likely has virtually nothing to do with the PS5 design beyond being a "what not to do" cautionary tale. And no, the X1X is not an "engineering wonder", it's just newer and pricier. The Pro, from everything I've heard, is pretty much the absolute best console we could have gotten based on the mission statement of "make a $399 PS4K for holiday 2016 without selling at a loss". It implements early Vega features and focuses on smart reconstruction to punch above its weight.
There's this weird assumption that even if Sony had targeted $499 and holiday 2017 like MS (and I wish they had) they still could never have matched the spectacular and glorious X1X, and that's never been worth taking seriously. I think it mostly comes from people who see the X pushing more way more additional pixels than its 40% extra GPU power would suggest, and put this down to Microsoft engineering magic rather than the far more obvious "it has 50% more RAM with 50% more bandwidth". That's why those big resolution jumps only happen in certain games, while in others the jump is a much more standard 40% or so, or even less in some odd cases.
Microsoft is absolutely a great hardware company. So is Sony. Sony making a slightly better next-gen console is entirely believable, especially if they may just be willing to take a somewhat bigger loss or got slightly better APU pricing or something.