I think they should... just depends on what content you value as of now... How "live" do you need it?
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It depends on your definition of a home theater system. If it is something that supports HDTV and 7.1 audio, then any PC with an HDMI port will do the job. You will also need a Blu-ray drive to play back HD content from Blu-ray discs and an internet connection to download HD movies. An external A/V system with 7.1 speakers and an HDTV display (1080p) will complete the system.
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My xbox 360 is pretty much a cable box now that we can watch netflix on it. I dont think we've used it for gaming since they added that feature. Now if only there was a way to get actual television through the xbox, we could officially get rid of alot of cable wires.
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With the power of Broadband being felt everywhere in the world, (including here in my little Hamlet in Kenya) . And the availability of Services like Apples itunes store, Apple TV the use of computers as home entertainment units has truly gone global and mainstream.

In practical terms it is much easier and cheaper for someone in the developing world or third world to invest in a PS3, like I have(for Some $400, kshs 32,000) and get a well known Branded Machine That Doubles Up As My game console,my DVD player, Blu Ray Disc Player, Music System, Internet Portal, PC Name It.

Whereas if I went the way of buying this items individually as separate units it would easily cost me upwards of 10 or 20 times that figure. So yes it has safely and rapidly transitioned from geekdom, i.e geeks plugging computers to their home entertainment systems to mainstream use.
Source(s):
http://www.us.playstation.com/
http://en.wikipedia.org/wiki/PlayStation_3

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