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Your average consumer is not paying $700 for a switch/router

No, but they weren't spending $1000 on a gigabit switch in 2004 either.

If you're serious enough about home networking to run cables through your walls, $700 for a switch is nothing compared to the labor cost.

You'd be hard pressed to find a 25 gig NIC on a consumer motherboard. This wasn't really the case for gig hardware in 2004.