Dell sells allot of mediocre PCs to small and medium size businesses. Hordes bought the pre-rigged sets thinking they made a killer deal with Dell. 

They (customers en masse) are just now catching on to that fact. Fast procs with sub performing parts, makes a Dell.

Exploding Laptops doesn't help either

I do not think that Dell buyers have dumped the Dell online selling model.
The possibility to confiugure online your PC is and will be a great value for most users.

However the market is quickly shifting from desktops to notebooks and, for many people, a notebook is something between a PC and a Gadget, so aesthetic and design does matter. In this case people want to have a direct look at the product.

Also Dell products are not properly popular for their design, but it seems that recent models have improved.

A better presentation of the product in the Dell webside would also help (like Alienware site).