They don't get updated because it's more profitable for them to milk the same console for five years than it is to release three new consoles with better hardware in that same time frame.
And the reason it's more profitable for them to do that is because of the market they target which is either family oriented, or your average 13-22 year old guy who just likes to play some games without buying a screen or putting forth a solid investment.
Yet you can't play any game at 1080p on any console with exception to a few games on PS3. In fact, Crysis 2 runs at a little less than 720p and consoles only ever get 25-30 FPS.
How exactly does playing at a desk rather than sitting on a couch mean you're "huddled" and "playing by yourself". You're not any less alone just because you're on a couch.
There's a couple of reasons for that. The first is PC gamers are buying the digital copies of games more and more, rather than going and buying physical copies -- it's just so much cheaper.
The second is that there is a section of games, controllers and consoles, and accessories, for each console of which there are three: XBox 360, PS3, and Wii. PC is only one section with just games, so of course it's going to be much smaller in comparison.
Where'd you get this idea that you need to spend $1,000 to build yourself a rig and that it needs this monstrous 1000w power supply? You could build yourself a decent budget gaming rig for as little as $400 or $500 and with a 250-300w power supply, and that rig will perform a lot better than the XBox 360 whilst giving you the option to upgrade over time as well as access to game stores like Steam where you can get some games up to 75% off or more.
That's really why building a PC is cheaper in the long run. You just spend so much on games for the console yet you can get them so cheap on PC. (Not to mention accessories, controllers, XBox Live.)
Oh and it doesn't only cost $250, as I said above, and a console certainly won't come close to matching the quality of even a budget gaming rig. Just compare Crysis 2 on XBox 360 to Crysis 2 on the lowest settings on PC.
MOST people aren't gamers. Most gamers however, do update parts in their system and usually at a small loss since you can sell your previous component.
