10x is about what you'd expect for the interpreter overhead in a simple snippet like that.
I think the only reason they haven't is the legacy C interface; it's a shame they didn't do it for Python 3, but I guess it could have delayed conversion of c libraries even more.
Though that still wasn't as fast as gcc on my system (core i5 3.4ghz; using 1e8 rounds):
* cpython 2.7.4 - 1.131s
* pypy 2.6.0 - 0.090s
* gcc w/ "-O2" - 0.050s
I'd say JIT is neither about compilation nor interpretation, but about optimization.