Because a successful console will still be popular even if it's superceded. Look at the PS2, it was well into its lifespan when they brought out the slim one. Furthermore, the 360 is such a flawed product in terms of hardware, they have no choice but to keep at it until the MTTF is reduced as much as possible. that way, they don't have to be saddled with dealing with a problematic prev-gen when they're launching the next one. It's also important for the customers to know that MS is committed to a full life development schedule, so they can be assured of that with the next gen one too.

So, by continuing development on the 360, they learn what not to do on the next-gen one (i hope!), and the player base keeps on increasing...