You can mod consoles, install unauthorized software on them, even entire new OSes (the original Xbox this was actually very easy, didn't even require hardware mods). PS3s were open for awhile and some organizations even used them in compute clusters.
The vast majority of console buyers probably don't care or plan to mod anything. The whole point for those kinds of consumers is that they don't have to be computer geeks to operate a console.
Nobody goes to Walmart and says, I want a inflexible console that I can't install anything on!
No, but they do go to Walmart saying (indirectly) that they want that gaming thing where they can simply pop in the game disk they bought off the Walmart shelves and it just play games without them having to do didly squat else.
I don't think PS3's sales instantly exploded when they closed their platform. If you want that so badly, you can just pretend the software can't be changed on it and be none the wiser.
It doesn't work the same way if the average consumer needs to "pretend" that it is a closed platform. It actually needs to be closed so that there is zero computer knowledge required to operate (and maintain) for it to be attractive to the masses. It really is that simple.
At best, to the end user, if something is open and closed it is total indifference. They don't care either way.
It's the same issue. It is very difficult to create an open system that is also very consumer friendly. This is why the iPad is successful with people that don't know anything about computers (my mom is a perfect example - doesn't know or care about computers but loves her iPad). They just don't need to know anything geeky to operate/maintain it.
So while you say they don't care, they do indirectly because else they just would not have been interested in using it to begin with. And you need these masses to make such a product successful.