I'm going to reply to this point by point... Not because I want to break down your argument or anything, just so I can properly address everything within context.

PC gaming is fine, but there's a lot of overhead. You'll have to upgrade your graphics card every couple of years (and you may have to upgrade your power supply to support it), and then at some point you have to upgrade your motherboard (at which point you might as well buy a new machine). On top of that you have to deal with graphics drivers. That's all well and good if you're a hardware person, but it's a big pain in the ass if you're not.
There isn't any more overhead than there is with a console. In fact, if you plan your system correctly, there is a lot less as you often times won't have to build a completely new system but just replace a part here or there. Video cards depend largely upon what games you're playing and how you're playing them. If you time your purchases correctly, a decent mid-range video card should perform very well for
at least a few years. Will you get bleeding edge performance out of it? Probably not, but then again you don't see that on consoles either. As far as power supplies and motherboards go, those should not have to be upgraded very often at all unless you have a poorly planned system. Laziness seems to be the enemy here more so than anything, and that assumption only seems truer from your remarks given graphics drivers. New drivers don't come out all that often (perhaps a few times a year at most) and they are hardly a hassle at all--just a few clicks. This is no different than updating your Wii's firmware, keeping your firewall up to date, checking the oil in your car, etc.
Boasting about the superiority of gaming on custom-made PCs is like talking trash about a Mustang GT straight out of the factory because it isn't as good as a Mustang GT that Chip Foose just totally kitted out on Overhaulin'. Duh, of course it's better, it's entirely custom-made. But a lot of work went into it to get it to that stage, and that isn't work that everybody is willing to do or pay for.
A lot of work is not exactly something I would equate to piecing together your own computer. A dozen screws and some plugs is a far cry from supping up your hot rod. Besides, muscles cars have no real purpose, as the roads have speed limits. A well built computer will be great for not only gaming, but also photo manipulation, video editing, graphic design, etc. Hell, depending on what you're running now, it may even show a boost as far as loading your e-mail client goes!
With a console, you're pretty much buying a ready-made high-end gaming PC. It won't be the best platform out there forever, but it'll be pretty darn good for a while. And, since the hardware is static, as time goes on developers can maximize what they get out of it. With the PC, developers are always coding towards specs that Nvidia or ATI are releasing a year down the line, so no matter what hardware you have, you're always out of date. The fact that games from three years back don't even run very well on my PC (which isn't wildly out of date) doesn't make me want to hop into the PC arms race.
You are not buying a high-end gaming PC when purchasing a console. Consoles can do very little outside of play games, and usually quite poorly when they do. Your own computer may not be very old, but age doesn't necessarily mean much when talking about specs. Just because a lot of games are geared toward the future doesn't mean that they aren't scalable. PC games have options about settings for a reason, so you can play at console-level graphics or experience the whole shebang. There is no more an arms race on the PC than there is on consoles, the difference is that
you are responsible for planning the upgrades to your system, not Sony or Nintendo.
So yeah, I could spend $500 and build a decent gaming PC, but why bother? Just to be able to control an FPS with a mouse? I could care less, especially when all of my friends are playing FPS's on their 360's and PS3s anyways. I could build a PC and get the pure, uncut, unadulterated, real-deal FPS experience, but I'd be doing it by myself.
You need a better class of friends then. Or at least to learn what it is that makes the internet and LAN parties work so wonderfully. Besides, the PC has far more to offer than just the FPS genre. Oh, and you don't have to pay to redownload and play your old games! Want to pop in Wolfenstein 3D? A compatibility layer is all that's stopping you from installing from the original floppy!
Besides, gaming with a keyboard and mouse just isn't comfortable. You can make it more comfortable, sure, but you have to buy - guess what - more equipment.
You should already own a comfortable desk and chair if you do any sort of work on the computer as is. I prefer wrists pads as well, but that's just my opinion. You're doing the technology a grave disservice by relegating your PC to the corner of the living room and sitting it atop that card table. It's sad that youngsters will buy $300 cell phones, go in debt to afford gas-guzzling vehicles and flimsy diplomas, but won't make use of what is the single most inspiring technology in a long time simply due to perceived price points. Look beyond just gaming--PCs aren't limited to that, they're literal tools of creativity, even if MySpace and YouTube would like you to think different.