"The ones that sell are, consistently, the cheapest, lowest specced machines that get the basics right and are game systems first. The Playstation, the Playstation 2"
Let me stop you right there. Neither of these consoles were the "cheapest, lowest specced" machines when they launched.
If you actually look at the launch price of the PS1 (in 1995) and the PS2 (in 2000), and factor inflation, the prices of these consoles are not that much cheaper than the UK £425 PS3 launch price.
PS2 was £299 back in 2000
PS1 was £299 back in 1995
Of course, it's convinient for your argument to forget this, and try to fool people by pretending the PS2 has always been £95, and that's why it suceeded, but the reality is, it was also expensive early in it's life.
There are over 12million PS3 owners that disagree with you that the PS3 is overpriced, as with everything in life, you get what you pay for. Right now, if you pay 360 prices (only a few quid cheaper than a PS3), you get shitty hardware, 2000-era DVD drive, and a fragmented product range, many of which lack even a hard disk.
If you pay Wii prices, you get a slightly revamped GameCube, with mostly crappy underwhelming games. A PS2 is vastly more fun that a Wii.