Take the change from Assassin's creed 1 to AC2 for example. Seeing how much better AC2 is compare to AC1, it's hard to believe they came out in the same generation. Then AC:brotherhood came out and made it even better.

If there were no sequels, gone would be the insanely in depth universe building of a Mass Effect or dragon age. Wow we put years worth of work into making this crazy deep universe with really interesting characters. Now since we made one game, no one will see any of this stuff ever again. We probably could have saved months of work there. Maybe if we could make a 2nd game, we could really flesh out all this stuff, or use it in some other ways.  Sequels are the 2nd season of your favorite TV show.