The problem is that a lot of people think of 'upgrading' their PC for games, they're thinking of just buying a whole new machine, either a $1,000 package from Best Buy or a ~$2,000 beast from Alienware.
It's actually a lot smarter to buy individual parts and upgrade with those. It's not like you need a new keyboard/mouse/set of speakers/case/optical drive.
I'm in the process of planning a major upgrade to my current box. New Mobo, new CPU, new Video Card, more RAM, new PSU, bigger HDD. Everything else I'm just going to reuse from my old box. I'm still comparing components, but at this point I don't expect I'll be breaking the $700 mark.