I have yet to find a piece of software, game, whatever that's not reasonably performant on it now 5-6 years later. There's some high end virtualization stuff that just doesn't work on it anymore, and a few recent Demoscene releases struggle a bit, but if I keep with web surfing, document writing, music production, photoshop/gimp, and games, it run all that stuff well enough that I don't feel any pressure to upgrade.
It used to be that to run the latest AAA game, Emulation or Demoscene release I'd have to upgrade pretty much my entire machine every 2-3 years. Now I'm seriously considering going another year with this machine or making the plunge and building another. BSNES runs like a dog on it, but I can always ZSNES or SNES9x my way to good-enough-ville.
The churn just isn't there. Windows 7 is rock freaking solid, $500-700 desktops at Costco are better than my current desktop in every respect. If you buy a computer today, you can probably happily use it for the next 10 years and never feel the need to upgrade your system for any reason.
Software used to drive this stuff, but CPUs aren't getting faster in ways that users care, and cheap GPUs make up for the rest. There's no Doom or Quake or Crysis to force an upgrade (hell, most AAA PC games these days are just ports off of far less powerful consoles). Casual gamers are on WoW capable machines (an almost 10 year old game!) and have no reason to move.
The market is simply at saturation not death. It's become like telephony or indoor plumbing. Everybody who's ever going to get a computer (except for kids) has at least one. Hell, my 80 year grandmother finally bought a laptop so my mother can play out of copyright mp3s for her while she cooks.