Then who gets the licensing costs for the Dev kits? Who gets the 30% cut of the digital store? Who gets the cut of accessories sold? Each game sold? Who's responsible for updating the OS?

The console market works how it does because they sell the tech at a loss and make up money on the ongoing sales. The 3DO tried the open source model in the early 90s and ended up with ridiculously pricey consoles as all the manufacturers needed to make their profit upfront. Eventually, there will be no price difference between a console and a PC if equivilent specs.