It's very important, when looking at console specs, to not compare them to those of a PC. PC's are flexible with much more background processes going on. They need to be able to handle a broader range of applications than a console will ever encounter. A console developer knows this, and thus do not have to produce an "overkill" machine, being able to stream line hardware and software for a specific, known use, requiring less memory and computational hardware. You can't just say "wow, my tower has twice as much ram and a better graphics card" because your tower is likely running a bloated operating system with dozens of times more functions than is necessary, as well as support software that consoles simply do not require (anti-virus, PnP support, drivers for whole range of hardware that could be from any manufacturer). It's the equivalent of cars, in some ways. You don't need a V8 engine to have a fast car. You can accomplish the same thing, or better, with a smaller powerhouse and more fine tuning.

The graphics processor isn't very impressive, but it's leaps and bounds ahead of current console specs.

8 core at 1.6 GHZ? Stupid move for a gaming console.