Agreed. Console ships without a game, one controller. So when you buy an Xbox it's: $350 for the box (depending on when you bought it)
The "standard" model (wireless controller + 60 gig drive) is $300
$75 for wireless ethernet card that wasn't built-in
What, because an unreliable wireless connection is so much better than sticking with wires? Actual price of it is $100, but it's hardly a requirement
$60 for additional controller
More like $50 if you need a wireless, less for a wired controller (which also works with your PC). These go on sale fairly often, and can be had for more like the $35 range
$30 for the recharager battery pack designed to work with the controllers but doesn't leaving you stuck with conventional batteries
$20 for a battery and charging cable, and I have no idea what you're smoking that they don't work. Only one I've ever had a problem with was a used third-party battery pack I got off ebay.
$x for cabling if you need hdmi or whatever.
Why stop there? What if you need a TV to play on? How about $1000 for that?
Wireless headphones are required in a household larger than one but I won't label that as equipment that should have come with the unit. Would be another $120 or something? Not required if you're pc-gaming at your desk but if the PC is a media center unit, you'd be spending the money anyway.
Required? Pish tosh. Turn the volume down, or get an extender cable for headphones. I see 25' for $1.62 at monoprice.
And as you mentioned, the default 20gb HD is small and you want to buy a bigger one for all the DLC and shit but wait, it has to be MS-branded, you can't save your stuff onto a conventional usb drive. And you'll have to buy a flash-based card to serve as backup to your HDD because you know the HDD could crash at any time. Don't want to lose a hundred hours worth of gaming to a dead disk.
Boy, this is fun. Default drive size nowadays is 60 gigs. 20 gigs was the old usual (and is what I have), and has been plenty big for me. Newsflash: you don't need DLC, and even if you get it, you don't need a huge drive. I'm not totally knowledgeable about this process, but I guess you can get the 120 gig platter that MS uses and install it yourself, run ya $50 or something.
And the worst part of all this is you know the peripherals will all change with the next system that comes out.
So... you're still doing computer games on the same hardware setup that you were using in '05?
Consoles were supposed to be for budget gaming and pc's for people with deep pockets. Console gaming remains extremely expensive.
 By my count, it's somewhere in the $500 games for a full setup, including games. Good luck getting a decent computer for that much.