To me the main reason for desktops is money.
Not the price of buying one in the first place but, as other people mentioned, the upgradeability.
You I look at the rig I am on right now, you'll see why:
The mainboard is now at the end of it's life span, it's one of the first AM2 boards by MSI, aged more than 3 years. It has seen 2 processors, 2 GPUs, 2 ram upgrades. Each of these upgrades significantly boosted the performance, none of them where priced in the region of even the cheapest computers.
But that's just the beginning. My Samsung monitors (one TN, one PVA) are 4 years old, and seriously, I don't see a difference to the ones you can buy today.
I've had the same case for 5 years, though it has been bothering me a bit lately, and I'll get a better-built one.
My speakers, Logitech, are so old, I don't remember, and finally my keyboard...
... is two years older than I am.
1985 IBM Model M. In perfect condition, hardly a scratch on it.