@Maestro : If you also don't mind me responding in points, easier to respond to
1. The X-BOX CORE SKU had wired controllers (not sure if it was the entire SKU or certain revisions, but I think it was ALL CORE models.My argument wasn't based on this fact, but even if it was i rebute "My argument is thus not flawed sir".
2. That is great and an important factor to some (if it is for you, i respect that), similarly Sony has for a while had PS1 classics available on PSN with PS2 library to follow but I would agree 100% that Sony did not give much attention to b/w compatibility although i believe this was intentional and as a PS3 gamer, i don't really care too much about b/w compatibility (i still have 2 PS2's in the house that work).
3. It's fine that some models didn't have HD outputs, but it seemed that MS willy-nilly removes features and functionality to achieve price points. I don't think that's a fair consumer practice when you assuming you buying a certain product with certain features only to realise there's no HD outputs or no HDD. (And this happened, i can find posts of people on forums that posted on this subject).
4. The failure rates of 360's based on the latest revisions of mobo's might be low ? The the reputation and perception i have of 360's is not one of trust, so I woudl have to wait for consistent and repeated reports of it's stability before I invest in one...does the latest 360's still come with a 3 year warranty?
5. FAT32 External support on all USB drives (didn't know that, thanks...might be a factor when I buy one for one of the bedrooms, least i know it can be a media player).
6. Peripherals pricing for items that are specific to that product is where you should profit from, but add-on's and components like hdd's, memory cards, network adapters is a big NO-NO in my opinion and would hate to see the media industry adopt this approach. I had an MVIX that came with a drive, but it was so easy to upgrade, my PS3 upgrades and my external drive exclosures all upgrade with the exception of the WD MYBOOK that I use at work which is very annoying !
7. The optical drive costs is moot.The Blu-Ray costs is more in manufacturing because of the laser and lens than the royalties as it was a newly adopted format and any consortium (especially one that comprises of Sony with all their failed formats) want the drive in as many devices as possible. I'm not sure why they exactly didn't include an HD optical drive but it's excusable considering there was a format war still going on...BTW, i have a launch 60gb and still no problems with BR.
8. MOST IMPORTANT - You are right, the consumer weigh up what they want, but it's not always from the perspective you consider...consumers aren't all tech-savvy and understand what the relevance of a component is and the impact of not having it (both currently and in the future, like parents buying for kids or people buying from loyalty)...if i can give a short example, i bought a blackberry curve on recommendation and brand identity, only to be very disappointed with features that are very important to me like customising the interface. It only had half the customisation options that i had on my much earlier 2003/4 Nokia 7710 where i could customise multiple desktops, arrange and re-name of icons at my will, custom backgrounds, custom icons, etc...I felt a little duped, and i'm sure that many consumers assess their needs and say I want a next-gen console, buy the arcade and realise they got an upgraded(or downgraded in some features ???) PS2....
If you need to realise most of the features in the PS3 are not bells and whistles (they are if you compare it to the 360)...they were what is 1. expected of any current gen media product including consoles(most media players play HD and have built-in wireless...my phone has these features) and 2. is absolutely required(e.g. HDD is required for gaming if you want DLC, if you buy to get great XBL games or if you want to DL full XBOX games ...you might say, something don't care about this..and i'll sincerely say you are lie'ng)
Just to share my gaming identity like you have, i currently game on a PS3, PS2, PSP and PC...I have owned a WII and early gen consoles (started gaming in the mid-80's)....but never owned an xbox...I enjoy wii sports for a short-while, love mario galaxy and thought wii fit will bring value, but it didn't so i sold it...haven't missed it at all. On my PC, I haven't played much this year, but Crysis, World in Conflict, Bioshock, Quake 4, Doom 3, Quake ET and more recently SHIFT is what i've played on PC...I've also played MS exclusives like Gears, Halo (remember getting vista for this 2 years ago), L4D and Mass Effect on my PC...(Dual core with 8800gt)
So i'm a pretty hardcore gamer..and played nearly everything if you have played and more, but just don't have the time or money to invest in every console and every game just for heck of it, although i've played more than 50 games this year and that's no lie.