I think the price was the biggest contributor to its success. It has always remained cheaper than the PS3. To most gamers, a cheaper console with pretty much the same games and graphics seemed like a better deal than the PS3. Blueray wasn't really a selling point. Ofcourse, many gamers might have regretted that decision after they realised Live was not free.
The average pricepoint of the Xbox 360 is higher than the one for the PS3.
Anyway: As you can see in this thread people see the Xbox 360 as the console that does it all. Some say it is because of Kinect and the focus on the casuals, some say it is due to XBL Apps, some say it is due to FPS and even violence for the core. It is all of these reasons combined and MS is smart enough to let people know.
Simple, isn't it?
No. It isn't. It hasn't been. Especially in the first few years.
according to NPD the average price for a Xbox 360 console is higher than the average price for a PS3 console. People bought more of the more expensive SKUs for the 360 and more of the cheaper SKUs for the PS3.