A lot of you guys on this forum are so immersed in your DX9 world that you tend to be a little out of touch with the mindset of the average gamer.
Let's put it this way - the average gamer is nothing like any of us on this forum. The average gamer has never played Quake or Unreal, may or may not have Starcraft (but is extremely bad at it!), and plays "The Sims" and "NeoPets" as their primary games. They might also have some "Big Game Hunter" and "Championship Bass Fishing" games. The average gamer is completely clueless about tech. They might be a middle-school child, or a middle-aged middle-manager, but they can hardly tell the difference between PC and Mac, let alone even THINK about opening up that scary computer case and messing around with the Magical Silicon Components within.
The average gamer does not know what a videocard is. If you ask them, they will say "how do you know that?", and you will tell them to go to their display options, and they will ask you "So, is a TNT2M64 good?". Occasionally, you will spot someone complaining on a Warcraft 3 forum that their computer runs War3 very poorly, and why the fuck is that, it's a "fast" 1 ghz celeron, their friend's "slow" 700 mhz athlon (with a GeForce3) runs at much higher resolutions no problem. These people are much more tech-savvy than the average gamer. The average gamer has never visited a gaming forum, and he wouldn't know how many MHz is in his computer anyways. Anyways, the average gamer would never figure out that his computer is running Warcraft 3 poorly.
The average gamer can't tell the difference between 30 fps and 100 fps, and he also doesn't know that he can run games at resolutions higher than 640*480. I know several people IRL who claim that their 32 mb GeForce2Mx cards are quite powerful enough, because they can run every game they have at "very good-looking settings" and still be perfectly smooth. By this, they mean 640*480 with high graphics settings. The sad thing is that their GF2MXs are a lot better than some other people's computers, who are running with integrated Rage or TNT2 graphics. (or even -gasp- Intel!)
We here tend to regard anything of GeForce2MX/Radeon7000 class as being totally inferior, the bottom of the pile, etc. To the average gamer, this is a very powerful videocard. No wonder the average gamer can't tell the difference between a GeForce4MX and a GeForce4Ti - they are both vastly more powerful than their current videocards, and at 640*480 there isn't a difference between them anyways!
Blizzard got a lot of complaints that Warcraft III's minimum system requirements were exorbitant, or that it runs too slowly on low-end computers. A lot of casual gamers regard Warcraft 3's graphics as being the most advanced of any computer game they have. (not a difficult task, considering that it's being compared to The Sims...) Yet, War3's graphics engine doesn't have anything that wasn't around in Quake 2 days. Does anyone really believe a DX8 game to be viable?
In any case, the technological lag between high end computers and "average gamer" computers is really not as bad as you think. The major reason behind the lag is just that computer graphics are advancing at such a fast rate, the casual user cannot stay on the cutting edge. All things considered, it is still true that the average gamer's computer today is better than the highest-end computers 5 years ago. 5 years from now, even "The Sims" should have "Unreal Tournament 2003" level graphics.