Merram Webster at www.merriam-webster.com/ defines retro as "relating to, reviving, or being the styles and especially the fashions of the past". Retro gaming is any game from a previous console. That makes Xbox 360 a retro console.
What is your criteria for saying that PS2 is the cutoff? What categories are there? Retro and modern? Is it the case that every system must fit into exactly one category, or can systems be in 2 or 0 categories? In other words, can a console be neither retro nor modern? Or both retro and modern?
If Xbox 360 is not retro today, will it be retro at some point in the future? Is that PS2 cutoff static or moving?
What about a game made today done in a "retro" style? In this case, I would say it is a retro style if it was done with the intent to look like an old system, or using cheaper software. A game made with a previous, cheaper engine would be unintentionally retro.
What if video games were never invented until last year, and a PS4 or Xbox One (Xbox 3) were the first systems ever made. And then someone decided to make a game in 8 bit, just for fun. That could not be retro because it is not referencing anything because nothing existed before now. What would you call that?
Your opinion on the graphics of the PS3 is interesting. There are games that were released on both the PS3 and PS4 and I think it would take a very trained eye to tell the difference. I think we have reached the point of diminishing returns. But I would not use this criteria in a definition of retro. By my definition, PS4 is retro because the PS4 Pro supersedes it. I therefore declare that PS4 an Xbox One are retro consoles.