The one main important reason why I drag my PC down to my living room home theater setup is so I can play games using the mouse and keyboard.
I have done this for years. First game I played on my home theater setup was DOOM 3 when it just came out. That was a long time ago. So...the reason that you, Darklordjames, despise the use of a PC in the living room, is the one very reason why I have a PC in my living room. The "kludge" is the reason I and many others do it.
Apparently, there are several in here that are in the same boat as me (as are many of my friends and coworkers). Ok, we are in the minority. It works for us but not you. We get it. When FPS's, third person shooters, or any other games that benefit from a mouse and keyboard, no longer supports a mouse and keyboard on a PC, then I will stop playing PC games on my home theater. At least until I am bored with the older ones that do
I guess I can see why those who only want to use a control pad on their HTPC would hate the mouse and keyboard interface, but I will never be in that camp and am too old school for that line of thought.
I love me some mouse and keyboard. All the other things (1080P, smooth frame rates, added special effects, etc) are icing on the cake. I want to play Skyrim all modded out, or Serious Sam 3:BFE, or Metro 2033, or Crysis and Crysis Warhead, or Diablo 3 WITH A MOUSE AND KEYBOARD on my home theater setup. This is why I do it. If the next generation of consoles have full support for USB mouse and keyboard setups, then my HTPC days may be numbered. I am not crazy about any of the mouse and keyboard setups used with current gen consoles. However, I have not looked lately at the options.