Honestly, many things about the PS3 would have made more sense had it been released in late 2008 rather than late 2006 ...
Basically, because of the way semiconductor technology works, they would have been able to release a system which was much more powerful and was lower cost simply because they had smaller manufacturing processes; Blu-Ray would have lost the format war (or they would have been forced to co-operate on a single format) but the format would be more established and far less expensive to include in a player.
The only real questions would be, how difficult would it be for Sony to deal with the XBox 360 had they given them a 3 year head start in North America and Europe, and would Nintendo's success with the Wii prevent the PS3 from being successful?
