Depends what you define as good, the average joe wants a PC to do what they use it for, in some cases thats browsing and listening to tunes.
If it wasnt the case do you think Curry's, PC World and the like would still be in business?
I could build the other 2 PC's in the house for £400 easily because they are outdated, but the people using them find them plenty fast enough for what they want.
I think you're confusing what you see as a good system, to what other people need from a system.
If a having a decent PC meant spending £600 a pop, do you think we'd have half as many PC users?....... this is why people buy from places like PC World, they have money but they don't want to spend silly amounts.
All the people i know personally that are not 'pc savy' generally say to me, what can i get for £300 - £400, because they want to get on the net but not be ripped off by places like PC World.
That said, if you still are not convinced £400 can make a suitable system then you have a lot to learn about computing. Thats not to say i don't suggest spending more, but not everyone can afford £600+ systems.
See this thread
http://forums.overclockers.co.uk/showthread.php?t=17653307
Not everyone needs the latest and greatest.