Much of the consolidation is driven by "accountants" who try to do the whole thing with SAN's and servers. Lots of stats about cpu unused, disks unused, so you get all your arrays as raid 5 carved into logical disks so that there's no "wasted" space.  fill up the disks, fill up the cpu's fill up the servers, one server with lots of instances, or virtual servers sharing resource of having resource shared and restricted.

I have some sympathies, having had to endure 3rd party apps ( who are probably the worst offenders ) who make statements like " it has to be a dedicated server otherwise we won't support you"  oh and all the users have to be dbo or sysadmin - so you wouldn't want to consolidate anyway!

It sort of makes some sense with 64bit especially but at the end of the day much of the consolidation is about providing hardware which is often vendor only supported - have you ever tried convincing anyone that a SAN is a performance bottleneck ? - there's lots of good things for them ( the vendors ) but maybe not for the dba.  200 databases still need managing regardless of them being on 5 or 50 servers -

My experience is that often consolidation actually degrades performance, especially as the DBA's aren't normally consulted anyway and the "consultants" often know nothing about rdbms let alone sql server.