Also, if someone is on a tight budget and they had to decide between a PC or a console, the PC will win every time. Consoles only perform one function (gaming), PCs many. There is no competition. And if you recall, most of the world is struggling just to get their first PC and consoles are likely out of the mix in those areas for years to come.
I will take it, that you are not familiar with that even a PS3 is a fully-functional computer, but, that is not you fault it is still not advertised/marketed as such. For instance, the PS3 already has word processors, spreadsheet, rendering, simulation, web browsing, and other applications. The issue is absolute lack of consumer knowledge of these facts, i.e. pointing to the earlier it's not really marketed as such.
In addition, there are many research organizations now networking together PS3s into supercomputers for their needs, instead of the insane priced Intel supercomputers.
Not to mention, the price of computers is a major reason why consoles are thriving, and furthermore created a market of bargain-bin personal computers such as the "Eee PC" between $100.00-$400.00. Roughly the same price range as consoles, they offer basic computer functionality (web browsing, word processing, etc.), but cannot do much beyond that.
That is another reason cited in news article for why PS3 sales were poor at the beginning. PS3 is for high-end gamers who had no problem dealing with PCs, therefore they picked the latter since the PS3 was almost the same cost. Everyone else looking for a console went for the WII because it was simple and cheap. Halo fans bought the Xbox.
As long as PCs exist they will be used for gaming, since by definition, a console can not replace a PC. If it can then it is a PC. The notion of a PC-appliance has been pushed for over a decade now and it has never gotten off the ground. Consoles are a secondary purchase, not a primary one. Smart people everywhere can see that and buy accordingly.
Most consumers did not buy into a new console, like the PS3, due to lack of library and price point. When there was an already established and well-entrenched XBOX 360 presence with a decent-sized library and price point at the time. In addition, I hardly see how a PS3 was the same cost of a PC, when the equivalent performing PC at the time was well over $1,000.00~ (excluding premium builder fees from major retailers and-or the cost of a Blu-ray player at the time). I wont even bother to explain how much of a price difference was between high-end gamers as you put it, because it's just silly in comparison. However, the story is overall different today.
The current stance is, there isn't much of a line left between consoles (XBOX 360 and PS3) and what we still consider the PC. The console is well-positioned to takeover a lot of the tasks of a PC, at a very-appealing price-point. In addition, the next-generation we might see step-upgrade options (like swappable GPU/GPGPU cards) for console computers.
I doubt we will see a definite end to PC gaming in decades, but the evidence points to an erosion of the market. To some what the market might be like in ten years, will be considered dead in their eyes and to others it will still be alive.