Ya know, I always thought that you could never spend to much money in Research and Developement, but this is overkill. I think that PlayStation is focusing so much on R&D for the console that they are overlooking the main reason for buying the system in the first place: playing good games!
Having said that, I agree with Madhtr..."How about make some decent games and release them before taking out functionality that some people might see as you giving up."