Microsoft is betting several billion dollars that their CPU design is the best design. (As is Sony, of course
) Both companies probably considered a wide variety of CPU architectures before they chose their current ones.
In particular MS chose their architecture after Sony had announced the broad outline of the Cell architecture.
I think if MS thought that Cell was the best design approach, then they would have gone with a 4-SPE-and-one-PPC design. Sure, it might not have been exactly an SPE, due to licensing and IP issues, but I'm sure that IBM could have legally come up with something similar enough that it wouldn't make much difference.
Similarly, if MS thought that a low-end Pentium M or P4 would be the best CPU, then they would use that instead. They can't use a high-end dual core Pentium M or G5 because it would cost too much.
I think Microsoft honestly believes that general purpose cores are more useful to video games than SPEs. Now, they may be mistaken. But look at how things turned out last generation: Sony's super-custom EE was roundly out-performed by a low-end P3, mostly due to better caches (and out-of-order-execution) on the P3. It's quite possible that MS, the word's most successful software company, might know something about computer architecture design. And don't forget that IBM, who also knows something about computer architecture design, also proposed a four-PPC architecture to Sony, only to have Sony insist on the more risky Cell architecture.
Another way of looking at things is that MS is betting on improving game code as it is now, while Sony is betting on improving game code as it might become. Sony is betting that if they provide 7 SPEs then developers will figure out how to use them, even if it means contorting their game code to use far more streaming floating point than they otherwise would.
Historically, we saw that the Pentium's high-speed floating point gave it an advantage in some important games (specificly Quake) over other x86 processors. Perhaps history will repeat itself this time.
On the other hand, perhaps not.
It will be very interesting to see how things work out!