Actually, the thread title is wrong. On the PS3, system RAM is 256 MB (the other 256 MB are graphical memory). On the 360, there's no distinction between graphical/system memory, it's just a total of 512 MB to be divided as developers prefer.
However, PC's operating systems take up much more memory than console's operating systems. While you are correct that most modern PCs have more memory available for games than consoles do, the difference is not as big as it seems.
Regarding upgrades, it doesn't make sense to have upgradable memory on consoles. Developers have to target the least common denominator, otherwise not everyone will be able to play their games. That is unless you want console gaming to become even more like PC gaming than it already is on the PS3 (installations, patches, OS updates, hard drive upgrades...).
My Mario Kart Wii friend code: 2707-1866-0957
