The Blu-ray pickup probably cost's little more than a Plain CD/DVD pickup but is one of the consoles biggest assets. Without it sony would never be able to sell a game to these console owners and thats how you make $$ so its an instant fail.
The best Sony could do is replace the HDD with a small Solid state drive ie 8Gb ,and continue component shrinking till one day they can make a profit on HW.

it's sony's chance to cripple the ps3 and sell more console. with that, they should reintroduce backward compatibility on the high end model because as we speak, the 160GB is the biggest ripoff console of all. You're paying 100$ more than the standard 80GB version for 80GB more space and 20$ value game. The arcade alone is selling like 40% of total 360s, so a netPS3 might boost sales by over 50%.

@czeckerychestnut: Actually the scenario you described is what the idea in the OP would be addressing; Sony has PSN which is the cheap car, but it requires PS3, the Johnny Walker, to run.
Of course, everyone who'd want to play boxed titles, would still buy the regular PS3. They even could name it as PSN.

The games could all be made with the normal PSN restrictions in mind. It's pretty intresting, that people buy games from Steam, despite it being online.

@BTfeather: With the 70$ connection it would take only 53 seconds to DL the 20 gig file. I don't see the problem there, since with the connection speed, it would be faster to stream games via internet than play them from BD.

Of course this solution would only be feasible with a majority of the existing library available to download on the PSN. You shouldn't have to stipulate that.

To get around the large download sizes they could implement a 'cloud' service where the data is cached to the local machine - this wouldn't necessitate a larger hard drive as well.

A lot of the games have duplicated assets on Blu-ray discs to avoid longer load times of the slower seek times of CLV in Blu-ray. This would mean that downloaded games would be conceivably smaller than their blu-ray counterparts.

"nooblet" really? Is that your snappy comeback? Alot of maturity there buddy. Its amazing how some idiots think a higher post count makes them some type of greater authority on this site. I frequent that site alot, I just dont post every 5 seconds. So get over yourself, your e-peen dont mean nothing to me or anyone else.

Thanks for the concern, doc. I'll be fine, though.

OT: Sony is going to have to do SOMETHING to lower the price or it will be another long year until they can actually afford and want to do a price cut. I don't think removing the Blu-Ray drive is the solution, but they are going to have to figure something out.