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There should be some focus here, as everyone is talking about sth different.
Even the OP isn't really clear enough.

So a hacked system is a system allowing you to bypass some restrictions of the system, that's all. It's not telling you if the functionalities you get are legal or illegal.
Then, there are software hacks (require no hardware modification) and hardware hacks.

So let's get this straight.

Why no hardware hack ?
Easy: because of money. It's just too expensive to do like most people said. Even if there existed one, people would be reluctant to break such expensive hardware.
There exist hardware hacks to play illegal material on Wii and XB360.


Software hack now.
As people are talking about different things, we have to be really clear about what we're talking about.
Let's start by what doesn't exist: there is no software hack to play illegal material on PS3. There, you can't play a commercial game from your HDD on PS3 yet.
BTW, that's the same on the Wii (no, not even the latest flaw discovered allow you to play backups on Wii).
But there are software hacks that allow you to play homebrew games from some storage solution (Flash card, HDD, ...) on the PS3.

Also, there are less incentives for software hacks on the PS3, as there's already access to an OS to develop games on it, and its games are already region free.
We had to have software hacks to get both these functionalities on the Wii though.