The Cell processor is a behemoth. It's cutting edge, much the same way early Motorola chips were cutting edge when there were RISC/CISC chips. They powered Macintosh computers in ways never imagined by developers. With Intel adding more cores to thier CPU's in keeping with Moore's law, maintaining backwards compatibility was always a bit of a burden. The Cell was designed from the ground up to be multicore, and doesn't have as many legacies to worry about.
The biggest expense in a CPU is the architecture and production. The Cell efficiently deals with both quite handily. To double the speed of a Cell, just throw more cores into it. The manufacturing is there, and the yeilds can be increased the same way the PS3 Cell is managed now -- put 8 cores on each CPU, then disable any single non-functional one, or disable a random one if all are functional. The Intel process is to produce (for e.g.) a quad core system, but have 4 cores that work. The problem with the costs of that is there will be 4x the failure rate, as there is no redundancy. Or no extra core to backup/throw away. As well, multi-core is a great way to reduce chip design times. Instead of designing a whole new system, just design smaller more specialized chips and use more of them.
Sony seems to know what they are doing in the hardware department. They will without a doubt, be cutting edge, and relevant for years to come. No one seems to care that the Xbox is using 'recycled' (meaning x86 compatible) CPU's. Why should Sony be any different? The CELL is powerful, expanable, and arguably, more suitable for a gaming console. Increase the clock speed by 25% and put in 16 cores. It'd be a monster -- with nominal design/manufacturing changes -- leaving the consumer with a reduced cost, and a killer machine.