There is a huge problem here. Yes, silicon is cheap, however, the interface is still the biggest problem.

A real world example. A dishwasher... now they have touch sensitive buttons and lots of leds. The dishwasher's control board is about half the size of a piece of paper. And the actual brain of that board is one chip, smaller than the size of a dime. While the circuit board has lots of big clunky objects that are used to turn on and off various motors. Great big connectors for sensors, and a ribbon cable that connects to the control panel.

So, although the "brains" of the dishwasher is tiny and costs less than a dollar, the rest of the control is large pieces that cannot be made smaller because of ohms law. They need to be big enough to handle the power throughput.

Similar, a CCD (so the computer can see) is actually very small. But it needs a lens which cannot be made smaller because of light wave-lengths.

A nearby radio wave interface is just 6" to 12" of copper wire. (usually it is a path of copper that spirals around the circuit board. You can see one on the back of many cell-phone batteries) But, you still need that distance of wire somewhere. It can be made really small, but it has to be attached to the chip and it has to be prevented from grounding itself.

And the worst part of computers is the interface. It is in the stone age. Why do we still have viruses? We cannot rely on computers to do what we tell them to, due to pre-existing states that we are unaware of. (just try to tell windows to kill a virus that's running on your computer) This is a problem with interface. The computer does not tell us all we need to know.

As in, a cell phone should be able to show us that the microphone is on and which program is using it. It fails about both of these necessary interface parts.