That's not a trivial task you're undertaking. I know of one project (Console2) which basically polls the screen buffer of the underlying console window and displays in its own. You certainly will have trouble coping with interactive applications like Far and the like as they (a) rely on getting keyboard events and (b) on manipulating their screen buffer. Both are icky things if you want a suitable wrapper around the console window functionality. Mouse input is possible as well (unless Quick Edit mode is enabled) which could give you further headaches.
I doubt you can use a ready-made control for this. Basically you need to display a grid of cells each of which has a foreground and background color. You could probably use a RichTextBox for this but I'd guess it's far from ideal.
Also I don't think no one at MS ever thought of this. It's just that there's a limited budget for new features and every one of them needs to be specified, implemented, tested, tested more for regressions with millions of applications out there, etc. It's just a freaking expensive thing (if you don't want to misuse your customers as testers, which they aren't).