The main problem with Dell, like many companies such as Intel, Alcatel-Lucent, Samsung, etc., they only hire foreign labor in the United States.
The reason for the lack of innovation by this company is not for lack of will by management. It is just that Michael Dell is so cheap he only hires Indian contractors in the US through very unethical consulting firms, mostly owned by foreign firms or government contracting firms in foreign countries.
His costs are relatively high because he pays the foreign contractors in the US about the same as the Americans are willing to work for this company, but instead chooses to outsource all IT, help desk, Q/A and assembly to India, Malasia, Philippines, China, and other slave-labor markets.
He succeeds in attracting the low-income, lowly educated people from the USA because his companies pays relatively low salaries. Employees of Dell also work 60-70 hour weeks, on average, because the companies hire foreign labor or American university graduates right out of college. It takes 2-3 years for Americans to realize that Dell is a bad company to work for (due to the lack of conscience for a balance between work and home life).
Wonder how they treat employees in foreign nations, considering the way they treat domestic labor?
I think your conclusions are clouded by your personal feelings towards the Company. Instead, if you look at the current market data, esp in emerging markets, you'll see that Lenovo is killing both HP and Dell, both in terms of sales opportunities as well as pricing.
If current trends continue, Dell and HP's PC business will indeed go the way of Gateway, and others before them.