Jerricho - goates summed up what I was getting at pretty well. The range of available games is limited, and while the G5 has plenty of power, in the iMac it's coupled to some fairly limited graphics hardware. Any PC costing the same as a new iMac will probably outperform it as a gaming platform. Also, with a PC you just swap out the graphics card in 12 months when something better comes along (unless you've got yourself some crappy broken-by-design box - some Dells, for example). As I can tell there's no easy way to do this with the iMac. That's quite a limitation for a games machine.
I have many friend's who have pretty much given up their PCs for a console anyways.
It's a good way of doing it if you just want to fire something up for a quick blast - I don't play many games, so a PS2 is fine for me. Still, a PC with a good graphics card is a must for a serious gamer (plus PS2 and X-Box of course
).