Sony developed the Cell for exactly the same reason they developed the "Emotion Engine" for the PS2:
Marketability.
Sony got a fantastic reaction from their advertisements of the Emotion Engine, people gobbled it right up. It didn't matter that the design was atrocious or that the Xbox and Gamecube were more capable, this thing had specs out the wazoo and a sweet marketing name. Its success was all but guaranteed. So they figured, go for the 1-2 combo punch, Cell and Blu-ray, two more sweet technologies with marketable names. Unfortunately, they just weren't able to offer these technologies to customers at a reasonable price, and the marketing wasn't enough to get people salivating (not enough people, anyway).
The sad thing is, the Cell+RSX is actually a much better design than the EE+GS of the PS2. If Sony could have made it more affordable, if they weren't trying to capture the high-def movie market at the same time, a lot more gamers could be enjoying the benefits of this design (and a lot more developers would be supporting it).
