I completely agree with this statement. Apple really needs to focus far more on gaming. I am a professional who uses a computer extensively, and I'm looking for a computer that can perform my business tasks, and will also work well for gaming. I envision Apple designing a simply desktop that is easy to upgrade for more RAM, new video card, etc, and is sleek and small. It may not be the *best* gaming solution, but a *good* gaming solution out of the box. It could also be a good mid-end for those who don't need the Mac Pro.
If I were asked what the "xMac" would be like, I would have a simple answer: Cube.
Take a look at the G4 Cube. It had an expansion-slot and 3.5" HD. Take the Cube (more or less), put a dual/quad-core Conroe in it (with a large, slow-moving fan). By default, the machine would be using Intel X3100 integrated graphics, but it would have a PCI-E x16-slot, so the user could add a separate hi-power 3D-card to it. The HD would be 3.5" HD.
Specs could be something like this:
2.4GHz Core 2 Duo, 1GB RAM, SuperDrive, 250GB HD: $999
2.67GHz C2D: 2GB RAM, Superdrive, 320GB HD: $1399
3.0GHz C2D: 2GB RAM, Superdrive, 500GB HD: $1699
Something along those lines. Of course there would be BTO-options to go around (3D-cards...). It would fill the hole between the iMac and Mac Pro quite nicely, when capabilities are concerned. I would call that machine "Mac Pro Mini", to differentiate it further from the consumer-oriented iMac.
It might not be as cheap as generic PC-boxes, but it would plug the hole in Apple's lineup. If you do not want an AIO, you have two choices: Mac Mini with slowish laptop-components, or quad-core workstation that uses server-specced hardware. Between those two is a HUGE hole. And if you want expandable machine, your only choice is that forementioned workstation.