Multi-processor PPC boxes are extremely easy to scale. Also, it's not out of the question to have 8-core or higher PPC CPUs (or whatever goes into the 720).
The Cell is anything but cheap, so I'm not sure why you believe the Cell will be cheaper than whatever MS decides to put into the 720. And to determine relative performance of CPU architectures a generation away is pure folly.
Just like the Amiga, the PS3 is a technological wonder of tightly integrated, specialized processor functionality. Just like the Amiga, the PS3's specialized architecture will be difficult to scale to the next generation. Not to say that it can't be done, but if vectorized processing was the best thing since sliced bread, Cray would still be the kind of the mainframe hill.
And as Sony has demonstrated this generation, it will cost a fortune to develop and to develop for.
The phrase "one-shot-wonder" comes to mind... 
EDIT: In all fairness, a defining characteristic of video game consoles is that they're one-shot-wonders. How many video game systems can anyone list simply used more powerful versions of the same hardware from the previous generation? Anyone?
