This does seem a little out there.
The use of an SSD certainly wouldn't help the cost any, but it also doesn't sound like it'd be that powerful.
I mean, I've looked at small form-factor PC's in the past, and honestly, you can get mini-itx boards that take I7 processors and have a pci-X slot.
They still end up being quite large, even though a mini-itx board is about 15 by 15 cm, which is pretty tiny, if you add in a graphics card and power supply you get a box quite a bit larger than one of these pistons.
BUT if you're willing to go with something like an AMD fusion processor, and can find a suitable case, you can get computers like that which have sizes comparable to game consoles.
And you can get boards like that with the processor included (and by extension the graphics card, since that's what fusion is about), for less than $100.
Add in a power supply, ram, hard disk, DVD drive, etc, and you can build a complete small form factor PC in the region of $200-300 or less.
It won't win awards for speed, but it still has power comparable to consoles, and can certainly run a fairly large number of games.
Maybe not as glamorous as this piston design, but it'd do a much better job of competing with game consoles than something which costs over $1000
(plus, these boards still typically have pci-express connectors. So if you need more graphical power, that's still an option. The only downside is the CPU, but again, boards exist taking mainstream Intel and AMD processors. It'd up the cost and size, obviously, but it's still more than possible.