Originally Posted by HILife
It's for both reasons. It is faster to have hardware built directly to the mother board then to have it bottleneck on an expansion slot, but they also did it for the $$$.
No, it's cheaper and better product lock in. Whether you have a video card or other peripheral onboard or in an expansion slot its still connected on the same PCI bus (the only difference is that thing isn't soldered on). You can
get some speed (or rather efficiency) increase by having various components on the same die as the CPU (e.g. and on die memory controller or an integrated CPU/CPU like newer Intel and AMD chips), but that kind of configuration is extremely limited by the physical size of the die, thermal limitations, and design/cost complexity.
And the fundamental limitation of all desktops is currently disk and network I/O.
There's a reason nVidia and ATI still own the high end GPU market despite both AMD and Intel having onboard (on die even) video hardware now. Ivy bridge has pretty much killed the entry level GPU market, but gets rocked still by discrete GPUs