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Had Sony released a PS3 with just a standard DVD player, would it be doing better? They could have launched a Premium version at 600, and then the non-Blu Ray version at 400

 Consider these points:

 Blu-Ray costs ~ 200 dollars extra per unit because of the new technology

 The PS3 would have been able to launch much earlier (probably March 2006 in order to match Xbox360), and it would have been 200 dollars cheaper, at a friendlier price of 400 instead of 600 dollars. 

At a 400 dollar price point, i think PS3 would have been able to mop the floor with Xbox