I would imagine part of the reason console games cost more is due to the fact they sell the consoles themselves at near even, if not at a loss. This is not unusual. Printers are commonly sold below cost, because the special cartridge and ink you have to use for the printer you bought so cheap is costing you your firstborn child.
Also, the market for consoles is very different, and the makers of the systems know that. How many kids do you know that take their computer and the games over to a friend's house and then plug it in and start playing it? Consoles are super easy to move around, and if you have the game you can basically play it anywhere that has same system with multiple controllers on one machine for multiplayer, etc.
Kid#1: Hey you wanna play <insert high res computer game name here>?
Kid#2: What graphics card is needed to be able to play that?
Kid#1: Just a Model 98000EFTZ.71 512 MB Nvidia GeForce F-2000 Quad Action Emodulifier
Kid#2: Hmm, will it run on my emachine T3406 with Media Accelerator 950?
Kid#1: Probably not, that thing have stone wheels on it, too?
Kid#2: It has Windows Vista, though...I need to upgrade my motherboard.
Kid#1: Yea dude, you gotta at least have a Pentium 4 or equavalent processor, and how much RAM do you have?
Kid#2: RAM, I dont know? Whats RAM?
Kid#1: Let's just go throw rocks at cars instead.
Kid#1: Wanna play Gears of War? I got it on the Playstation yesterday.
Kid#2: Sure, bring the game over...and an extra controller.