Good points already, but here's my take.

For most people, having 5 computers is a waste. You aren't really going to use them very much besides when you are 5-boxing, so it's a lot of hardware that won't get a lot of use. Also, don't underestimate the effect of having 5 computers in a room from a heat POV. It's significant.

Now, when I was starting this up, I thought like you: I'd need a monster computer to manage 5 accounts on one machine. Fortunately, I tried it out on what I had and found that it was fine (6600 core2du0, 2G upgraded later to 4G, 8800gtx@2560x1600). You can see by those specs that it's far from the best. While the video card is high-end, it's also running at a very high resolution which means it's got a lot more to do when running 5 wows.

There are also some things that software brings to the table that are more convenient (DNP, PIP swapping <<< huge, keymaps, etc). These can all be done via macroing and whatnot in the game with a all-hardware solution, but the software solution is much simpler to setup and manage, in my opinion.

There are advantages to hardware, as stated above, and they aren't to be ignored. You just have to decide which side of that fence you are on.

Good luck.