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<< It would be a difficult design and would look wierd, but why doesn't someone design a case where the cpu heatsink is on the outside of the case? Would make cooling a lot easier. >>
That would also not be a very intelligent thing to do. It makes one of the most sensitive pieces of equipment on your computer more open for static charge or someone breaking it off. Aside from the dangers of damaging the equipment, you would also need to completely redesign motherboard and case, both of which usually come from two different companies that aren't likely to cooperate to produce it due to cost. >>
He said HEATSINK.
You could use a heatpipe. Leave the CPU inside, but have the HSF outside 
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I figured someone would argue that point, so I already had counter-arguments planned out

I don't know about your computer, but on mine, I have the heatsink touching the processor through a conductive paste. My heat sink is metal, which conducts electricity, opening up for the static charge. Since the heat sink is attached to the motherboard, if it were broke off, it would take the socket that holds the chip away with it. Now, suppose we do use your heatpipe, it wouldn't be as effective. Solids conduct heat better than air, so less heat is absorbed, leaving your processor baking away. For the time, internal HSF are the most cost-effective solutions out there.