This leaves out an important step. When 3D graphics acceleration entered the broader consumer/desktop computing market, it was also a successor to the kind of 2D graphics acceleration that consoles had and previous generations of desktop computers generally didn't. So I believe that it's fair to say that specialized console hardware was replaced by general purpose computing hardware because the general purpose hardware had morphed to include a superset of console hardware capabilities.
GPUs evolved from graphics workstations (Pixar Image Computer, various SGI products...) rather than game consoles. Especially SGI pioneered a lot of the HW accelerated rendering pipeline that trickled into consumer graphics chips.
