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Everyone has said this already, but I thought I'd add my own anecdotal evidence and opinion to the thread.

The price tag was their biggest mistake. Had the PS3 been a slightly less powerful system with a cheaper price tag, and the overwhelming initial third party support of the PS2 days, I think people would have been more forgiving about the lack of backwards compatibility.

Also, I never had a PS2. Blasphemy I know. I was poor, ended up with a gamecube and stuck with it. Though I did play a lot of the best PS2 games with friends.

I was going to get a PS3 this gen, until I found out how much they cost. I still might get one someday, but I'm currently still poor, and ended up getting a 360 because of the cheaper initial price, and the fact that it has more of the games I currently want.

Poor good ol' Playstation.