The PS3 has the best variety, which is one advantage it has. This is why third party developers always chose the Playstation brand. First party sells on Nintendo platforms, unless its Mario related or a "non-game".
Shooters, and the must sell games (Rock Band, GTA, Madden, etc.) sell on the 360.
As far as developement costs go, its just a result of bigger, more complicated games. As gaming improves, so will developement costs. Its not the PS3's fault, but the fact that they are leaving room for vast improvements in gaming rather than ease to get games out quickly shows that Sony cares about gamings future. The Xbox360 just wants to get a foothold to put 360's in households to push its "live everywhere" campaign. At first its easier, so better games come out, but it hit its peak in under 3 years.
And to cut developement costs, in-game advertisements needs to happen. Its a simple solution, and I'm amazed it has taken so long to implement. Gaming is getting bigger and bigger, and people spend more time with games than they would with TV shows or movies. Could you imagine a pepsi or gamefly advertisement during every load screen? It would make them money, and make developers money. It needs to happen soon to support rising development costs.