But... that's just console games. As with AAA games, it wouldn't bother me much if consoles as we know them went away. PC and mobile are outstanding platforms for a lot of gamers, both hardcore and casual. Nowadays, most of the AAA games in my household (and many, many others besides) are played on PC, usually via Steam; our 360 primarily serves as a glorified DVD player.
The best thing to happen to console games would be for them to all use a standard format. For starters, it would reduce development costs for multiplatform games, especially the big-budged ones. Realistically, though, I don't see it happening for a long time, if at all (main reason: Nintendo). In the meantime, stuff like the Steam Box and Ouya might shake things up. Time will tell.
The PC vs console argument greatly depends on your playing style. If you plan to do a lot of gaming with your friends or family (co-op) PC gaming is not ideal. Also, personally I spent a ton of time staring a computer screen while at work. So, I have no desire to do the same when I get home.
That said, I agree with Javery that the industry is simply too big to fail. I love AAA titles because more often than not they show off the best that gaming has to offer. Developers have to figure out how to better manage their costs or modify their business model to accommodate their rising costs... figure out how to get more money from us (consumers).