Sadly, no matter what kind of hardware/specs it has, the price point is too high. One reason the Wii took over back a huge chunk of the market was the price point (yes, you can also talk about the novel controllers, games, etc, but it is hard to argue against the pricing argument). When I was at MS Games studio, there was a lot of research that backed up the idea of "console sweet spots". Sadly, those (Gartner?) reports cost a lot of money and are not public so I can link to them :-(