I don't see a small 4-ports USB hub as a major cost (about 20$CAN) and that's only if the switcher doesn't already have a USB hub (granted they'll be a minority).
Why wouldn't people use a 15" CRT with their Mac mini? That's exactly what I'm planning to do, what's wrong with that? Granted, most people will already have a 17" CRT (instead of 15"), but the same point applies. Keep in mind that a lot of people still prefer CRTs to LCDs (better contrast, better colors, higher refresh - especially when compared to low-end LCDs).
That 499$ Dell system doesn't have anything close to iLife, and will likely run Windows XP Home edition. Last time I checked, simply connecting such a box to the internet was asking for trouble (viruses, trojans, spyware, etc). Yes, the Mac mini is still more expensive (as far as hardware goes) when compared to the bottom-of-the-barrel Dell system. But we're not talking about a 1000$ difference anymore. If you want to be fair in your comparison, check for similar software packages to try and equal iLife, and your Dell box will end up costing more AND still won't run OS X nor a nice package like iLife.
You don't know what's an average Windows user, then.
As soon as I showed the Mac mini (and the price) to my brother, he asked "can I connect my monitor, keyboard and mouse?" then asked if there was any dual-layer DVD-writer option. Sadly, there's no dual-layer options, but apart from that, his next questions were about video editing, photo management, etc. Exactly what iLife and the Mac mini are for.