PC gaming is great, games are still selling excellently, piracy is not the boogeyman the industry intends it to be and is mostly used a scapegoat for developers and publishers to use when they want their games to sell more or to attribute poor sales to it instead of crappy gameplay design or lack of marketing. It's a brilliant marketing scheme and allows developers and publishers to stay in a good "innocent martyr" light that changes poor sales reception from the "game sucked" which is bad for the publisher to "the game was pirated" which like I said before is good for the publisher.
There are a lot of great releases coming out for the PC, just in September I'm excited about Spore, Pure and Crysis Warhead and the remaining 3 months offer even more gaming goodness. Video cards have become mainstream and nowadays a $200 video card can get you gaming at 1680x1050 and higher depending on the game, the rest of PC hardware is also dirt cheap to the point that gaming PC is not expensive at all.
Which brings me to another point, which is the misconception that PC gaming is reserved to gamers loaded with money. PCs are very cheap, in fact they are cheaper than today's consoles, let's think about this for a moment, a console without an HDTV is like a PC running games at 640x480. You can get by with even Crysis max settings at 640x480 with just a measly card like a 8500GT (less than 50 bucks!) and Crysis at max looks better than anything a console has to offer but of course no one cares about gaming at 640x480. A good 720p (what most games run at) TV can run you anything from $800-$1500 while a 1680x1050 monitor (almost 2X the amount of pixels and a much better DPI) is only about $500 for a good one. Console games also cost $10 more at retail, extra controllers, other accesories and online subscriptions add to the cost. Even if PCs are a little more expensive they still offer a better value (much better graphics, scalability for the future and doing something else other than games) so that's a moot point.
So by now you are probably thinking that I hate consoles, I do not hate consoles, not at all. The problem with consoles nowadays is an identity problem, developers and the very same creators of the consoles (I'm leaving Nintendo out of this, I'll get to that in a moment) are treating their consoles like PC replacements, first of all they are pushing technology and graphics. You can't play the tech game on a fixed hardware console that will get outdated pretty fast. That, however, is not the biggest problem. The problem is consoles releasing too many "PC" games, there are way too many shooters on the consoles and they play BAD because of an imprecise and limited gamepad configuration. What's worse, they are even trying to bring the RTS genre into consoles, it's just stupid, consoles are meant for games like Metal Gear Solid 4, Grand Theft Auto IV, GRID, Burnout Paradise, Devil May Cry 4 and others that play better with a gamepad.
That leads me to another point, out of the 5 games I mentioned earlier, only one (Metal Gear Solid 4) is exclusive to consoles, all of them are coming (or already out) for the PC. The difference is, unlike consoles not being able to use the PC's controllers, PCs can use gamepads and one in particular has out-of-the-box support and integral implementation in many games (the 360 controller). Devil May Cry 4 for example will use the same interface as the 360 game when the 360 pad is connected, you don't lose anything in transition but you do gain a lot, Devil May Cry 4 for the PC has higher resolutions, better graphics, a more stable framerate and two great gameplay additions (LDK and Turbo). If PCs offer more tech for the same price (if not less) and have the ability to play any genre the way it was meant to be played then why are they not more successful?
The main thing is ease of use, the main portion of the gaming population simply can't handle a computer well enough, they don't have the time, resources or knowledge to do research for PC parts or learn how to shop for them and integrate them in a PC. Beyond that, dealing with Windows can be a pain in the ass, crashes are not infrequent and troubleshooting can be tough, in some cases it can be extremely user friendly but some games like Mass Effect PC can be a real pain in the ass. Most users are oblivious of their ill internet habits and as such their computers are riddled with invasive software that only further complicates these issues. Another problem is the draconian DRM schemes, many users are reluctant to buy some PC games for the inconvenience and their Orson Welles' worthy status. A console, in that regard, is plug and play and provides a much easier to get in and out of games and online experiences, it's also a bit more "social" in that more than one player can play in console and the TV-oriented setup of consoles allows for more people to gather around a console.
The way I see it, there are too little exclusive games for consoles, especially for the 360, many are ported for the PC and all play better on the PC (with some exceptions attributed to lazy or incomplete porting cycles) of course there are some gems like Metal Gear Solid 4, Uncharted, Ratchet & Clank, Gran Turismo, Banjo Kazooie Nuts & Bolts, LittleBigPlanet and others that are both exclusive and play marvelously on a console's gamepad. I don't think a single person in this planet can put up a good argument as to why a shooter or RTS is better with a gamepad, sure they get the job done but they are nothing compared to a kb/mouse. I've been saying this for a long time, a first person shooter with a gamepad? hell, gamers deserve better. Those that play RTS with a gamepad just have bad taste in games, period.
Consoles have the edge financially but PCs are also doing extremely well and they provide an important source of revenue for the publishers that it's simply not a good business decision to leave your game out of the PC platform when you have the means to do it. For this reason, PC gaming will not die ever, it will continue to get more ports (that thanks to GFW are actually decent) and unique games like Spore as well as an ever evolution of it's technical aspect (and hardware physics are coming soon, that's gonna bring a pretty big gameplay revolution, mark my words).
Honestly I think PCs are better but I believe that consoles and PCs are meant to co-exist, this was painfully obvious in the PS2 days when games on consoles and games on PCs were vastly different so you got a different experience from each, this gen it's not really the same since all the focus is on shooters and tech demonstrations but there are still some amazing games like LittleBigPlanet which make owning a console a very attractive prospect. If Sony and Microsoft get it in their heads that consoles have different strengths than PCs and when properly exploited games on consoles can be downright amazing (honestly I thought gaming last gen was better on the PS2 than on my PC).
And then comes the Wii, this is really a third pillar of gaming and meant to co-exist with both the PC and the 360/PS3, all at once because it's different enough, however, the Wii is plagued with developers exploiting it's mostly casual user base and Nintendo being pretty much the only one releasing worthy games for it, the Wii is a good console, in my opinion I just don't think it offers as many good games as the PC or the 360/PS3 even though it's still a different experience.
I used to be big on consoles, I've bought a console every gen merely months after it kickstarted and with the PS2 last gen it got some serious playtime, this gen however, I'm not interested all that much into consoles because my PC offers what it has always offered (Strategy, shooters, RPG, novelty) but now it even offers excellent versions of games like Devil May Cry 4 and GRID that play beautifully with the plug and play 360 controller.
Also, I already said this, but I'd really like a console gamer to explain why the hell shooters are so popular on consoles and more importantly I'd like a both console and PC gamer to tell me, with a straight face, that playing a shooter is not immensely better on a PC than on a console because I have yet to find one.
That pretty much sums up my thoughts, I also think gaming development is becoming a bit too hollywood-esque but that's something that is universal for the whole industry so it doesn't apply in a console vs PC debate like this.