You forgot the factor of XBL and PS+ over the consoles lifespan and full priced games at $60. Let's say 6-7 years of this. 50x6= $300 just to connect to the internet you already pay for. A full price game every year 60x6= $360. We're talking over $1k by the time the console is dying... so no consoles don't cost $400-500..
I don't understand this argument.. First Console games do go on sale. Not to the extent that PC games do but 50% off on AAA games is not uncommon at all. Off the top of my head I bought ME:Andromeda DA:Origins and AC:Origins for $20-$30 each, and that included all the DLC and extras.
These were all purchased at least a year after release but PC games don't immediately go on sale either. Sure, Xbox live is an additional cost. But you get free games every month. And if you subscribe to the game pass you'll get access to a library at a price no PC service can match. Furthermore you get it from a company with more staying power than Steam/EA/etc. If Microsoft goes under chances are we live in a world where gaming isn't much of a priority anymore.
My Xbox console also offers me an easy way to get Netflix, prime video, Hulu, etc all in one place, always up to date, and connected to my large TV where I most want to consume this content. Sure I can throw together a small PC and shove it in my entertainment center but it won't be as convenient or cost effective from a hardware standpoint. I don't want to navigate a PC with a controller, and I sure as hell don't want to keep up with a mouse and keyboard in my living room.
Lastly the ease of playing games with friends that may not be particularly tech savvy is a major advantage. No one has to download voice comm software. No one has to worry about screwy networking preventing them from connecting. No one has to update their drivers to get the best performance their machine can offer.
There are a lot of reasons people may not be interested in console gaming but to suggest that price of the next gen consoles with the specs that have been released doesn't represent a great value is disingenuous.
The PS4 and especially the Xbox One were terrible value propositions at launch. This generation is a welcome turn around. I'm sitting here in front of a rig running a 3570K and a 590 that just replaced a failing 660TI. I was looking to drop 800-1500 on a new gaming machine. I'm seriously considering letting it sit for another year or two and playing any games my current rig can't handle on the next gen Xbox. That's something that would never have crossed my mind in previous generations.