No, it's hardly sarcasm.
Students don't need additional motivations for wasting time in college. A free XBox is the equivalent of saying "don't study, play Halo instead!"
Yeah, because students never play video games without the encouragement off the manufacturers. You could also quite easily argue that a free iPod Touch is the equivalent of saying "don't study, play Angry Birds instead!"
Out of the two, if I was a student, I'd go for the cheaper PC and get a free XBox. I imagine many will follow suit. Although, I also imagine a Mac is also still tempting to students. This however, is a good deal from Microsoft. If only non-students got the deal.