That and the X1 is a consumer electronics device. Not a games console. It just happens that it plays games. It's basically allowing for media consumption through apps on the TV. Pretty much makes your TV a multimedia computer and your paying a premium for that experience. The PS4 isn't marketed as a do everything device but a games console hence why it appeals to us at GAF more. Though it's not hard to see exactly were Microsoft is going with this.
The multimedia device side appeals to basically nobody. While this generation of consoles have sold 80 - 100M units each, the $99 and below media devices like Roku and AppleTV have less than 10M sold under their belts. No way anyone is going to pay 5x to 10x that for a gimmicky media player.