Allow me to cut in. Playstation 2 had never really faced much competition from any console. Even when the original Xbox was launched it still sold like hot cakes. PS2 was the only console to secure a huge part of third party & first party exclusive titles. Just check it's sales stats & you'll know how it managed to outsell even the PS3.
It's not a comparison of the next-generation console being on top in contrast to the PS2. It's pretty obvious that a next-generation console would have better processing power than it's older generation brethren. The only question is to how long can a older generation console sustain albeit facing competition from the newer generation. Microsoft had obliterated it's original Xbox from the grid once the Xbox 360 was supposed to be launched. But the PS2 is still going strong & shows no indication of stopping. This was never expected as every console has an estimated life is roughly 3-4 years (or less depending on the success). It's almost nearing a decade.
God of War II was not the reason for it's success but the original God of War & many other titles were. The original God of War was released in 2004, a time when people thought that PS2 had reached it's hardware limitations. It set a benchmark for lot of games available at that point. A lot of people bought the PS2 (and are still buying it) merely because it had a huge library of titles. God of War II was just one of the must-have titles. Even without it the console still had high amount of sales.
As for the stats, I got off from Wikipedia & it mentions that in 2006, PS2 sold around 6 million units in Europe alone & the 360 sold around 2 million units in Europe in 2006. So that shows how popular PS2 sales chart was even back when Xbox 360 was available.