If a PC and an Xbox can run the exact same game, and, let's be honest here, it doesn't look all that different, why WOULDN'T I switch if I had a KBM option? The differences in visuals are minutae.
Eh? I notice a pretty significant difference between 30 FPS (or lower) and 60+ FPS. Same with 720p (or less) and 1080p. And 2xAA (or less) vs 8xAA. And 2xAF (or less) vs 16xAF. When I can choose to have the objectively superior visual experience, why would I choose otherwise?
And the advantage of playing in a bigger screen with a better sound system is very compelling.
You can hook up your PC to your big screen and better sound system.
The hardware is cheaper. The games can be sold/traded. There are far fewer bugs. I can rent a game before I buy it...or choose only to rent it for a once- through.
Buying a new HD for your X360 is significantly more expensive than buying an HD with the same capacity for your PC. You also have to pay for Xbox LIVE and the MSRP of console games is typically $10-20 higher than the PC versions of those games. PC games also go on sale more quickly and more often. Just recently, people could get DX:HR for only $30 and that's before it was even released. As for rentals/used sales, you have a point. You can't do those with PC. However, if you don't care about giving money to publishers/developers (and if you rely on used sales or rentals, you obviously don't), then piracy is an even cheaper and more convenient option on PC. Try the full game for free, then buy it if you enjoy it at the price you feel it is worth. Publishers/developers actually make more money if you do that instead of buying used games or renting them.