I'd be really interested to see the price breakdown on a mid-tier system ($400-$700) that compares favorably to deals you can get on OEM machines.
Even with labor and profit, the reason PC building basically fell off the map is that nobody can compete with a lean-based supply monster like Dell. They can simply demand components at a fraction of what Newegg can sell them to and end user for, even when discounted. Plus you have to pay for the OS as opposed to it being massively subsidized.
The benefit obviously is total control, complete customization, newer versions of components, etc. Then again, when your Video driver causes your HDMI capable sound card to present itself as non-compliant and breaks something, there's nowhere to go for support. Or when a component simply fails, you're the one who has to figure out what failed, prove it, and get it replaced instead of simply returning the machine under warranty.
Building a machine yourself is great for some, but it's not for everyone. And in general, I think most of the time when someone says "I build something for $500 that would have cost $1,000" they are not considering all the costs. Otherwise there would still be thousands of small companies building computers for companies like there was in the 90's.
HDMI sound cards aren't really the realm of the average-joe user that you are describing
Obviously it isn't for everyone, but with a little research and time, you can build a vastly superior system to an OEM manufacturer. Sure, you can have component failures, but 90% of the time you can do a quick google search on your laptop to figure out what the problem may be.
This isn't for everyone, but I don't think I am alone in wanting to be able to do things for myself in a much quicker fashion than shipping my whole computer to Dell to fix a bad SATA cable or PSU.
The only place where the value of the components begins to balance out is in the very low end. As you increase the quality and performance capabilities of the components, you quickly destroy whatever value an OEM manufacturer can bring to the table.
Small businesses can't compete with the big manufacturers and the people that buy from Dell or HP, aren't the type of person that care about the performance gains you can get from building your own computer.