Almost every gen, Sony does a mini version of their previous console.
PSOne

PSTwo

PSThree?

Is that really the best they can do??

The Cell is a powerful beast that can't be contained in a small console.

I'm pretty sure that is a gross exaggeration.

Lol what? Example please 

Sounds like you're pulling this out of your ass. Ive played the first three, which have a wide and varied color palette, the order is set in the Victorian era of London and quite accurately reflects that, and I haven't seen much of BloodBorne. 

Super Slim is effectively the PSThree. It's a lot (like, really, a lot) smaller than the original PS3.

EDIT: extra comparison

My super slim is tiny compared to my old fat ps3. They did well especially considering the cluster fuck the console was in terms of hardware. (powerful but not cost effective)

The Super Slim not good enough for ya?? Its smaller than the PS2

Unless they find a way to sell it for less than 100€, little chance.

the reason we won't see any smaller versions is that shrinking the Cell is very expensive, a shrink of a highly complex chip like that probably costs several hundred million US$ if you factor in test-production and making up for initially decreased yields

with XDR ram PS3 has another architecture that pretty much isn't used anywhere and hence also didn't receive any shrinks > doesn't get cheaper to produce

I doubt Sony has anything like that in the works to release a redesigned/less expensive PS3, they probably rather increase their PSNow catalogue/capabilities