By that logic, solar panels aren't cheaper either, because their production is so polluting and resource-consuming.

At a conference a few weeks ago I was listening to a professor arguing that insulation and PV are the wrong way to go; the least resource consuming system is one with regular brick houses, warmed with geothermal energy, and with much heavier mixing of functions in our urban landscapes (actually, landscapes all together, and make the urban/rural distinction obsolete). So basically growing food on the roofs of houses etc.

He had numbers to back it all up, too. I'm not saying they're correct, but at least he's trying :)