There are a few problems with the MP as a gaming computer. "Overkill" isn't the right word. It's just all wrong.
1) The computer has so many things that someone who just wants to play games doesn't need, and they are all expensive.
- Xeons are not needed. A single 3.2 GHz Kentsfield would be as good as, or better, and certainly much cheaper, than two Xeons. A dual core Conroe would be good enough, if it was 3.2 GHz or more, with Penryn versions.
- It uses slow, expensive RAM. ECC is pointless for games. 800MHz? How about 1200?
- An 8800 GT is fine, but it could be a little better. And how about SLI or Crossfire?
So, all of these costs add up. No reason Apple couldn't throw together a fast Conroe or Kentsfield with 4 GB of fast desktop RAM (not workstation) with one or two 8800 GT category GPUs. I'm sure that would more than cater for all but the very snobbish gamers, and would be far less expensive than a Mac Pro, and better for games. It wouldn't need to be anywhere near as big either.
How about a PowerMac G5 with 7800 GT? How is it for gaming?