If PC gaming died tomorrow, and no games were EVER made for PC again, we would see a rise in piracy for the consoles. Homebrew, softmods, modchips, all of that would skyrocket, and then we would hear about how console game sales are falling because of piracy. It still wont change the fact that WELL over 50% of the games made these days are absolute shit.
Sure they may have great graphics, or 1080p capability, but the fact is that playing on a PC introduces a freedom that consoles will never match. We can create mods, maps, and conversions and all for FREE instead of charging for them (yes, im looking at you MS)....we can play with others, and use either a controller or a mouse/keyboard if we so choose, but it is OUR choice. Sure it means that there can be issues with cheating, or piracy, but trying to stop it completely is like playing whack-a-mole.
As for hardware, when a game is created, it needs to be tested on many machines. I work for a software company, and when we test our builds, we have a lab with around 200 machines ranging from a P4 1.4GHz with RDRAM through a Quad Core, and we test the product on each and every system. We have everything from Windows 98 - Vista. Some are specifically setup with issues, to "see what we can break". Some are setup to perform worse, and some just do, and by testing on all sorts of machines, we can make a product our users can rely on, and something that will run on a wide array of machines. We know its not our job to mandate a certain setup, or require a top of the line system to run well, because not everyone can afford that.