It's the other way around. PC games are rarely optimized to any significant degree because of the vast amount of different configurations out there, and PC gamers will just through hardware at the problem anyway. On a console, you know exactly what configuration all your players have, and any optimizations you do will benefit every one of them.
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His point still holds: in consoles, any optimization past a certain threshold is wasted effort because your consumer does not get any additional value (the game runs equally as smooth and beautiful with or without the optimization), therefore, doesn't pay more.
It's only wasted in the short term. If you optimize so much that you have a lot of unused resources left, you just use them in your next game.
You get to make that case to the project lead. :)