I think it was exactly what people were yearning for, or(complaining) about,the price being too high. Sony listened, and it seems they are going to continue working on a (software emulation) to employ backwards compatibility in future models that dont have the hardware CPU/GPU. As far as the HD(hard drive), it's not like its a big problem to upgrade to a larger one,or use an external HD via USB. With only 2 USB ports on the front,well theres your mouse and keyboard.And finally I really think there needs to be some GOOD games comming soon, games that push the PS3 to some limits! To sum up I think it was a necessary re-design to lower cost.
...Look at the other console makers doing the same thing. I got my fingers crossed too awaiting some AAA games! cheers