Don't forget that Sony is losing... what, about $100-$150US per unit at the moment? All these cost savings help to shrink this gap (esp. if they take the 20Gig model off the market).
I think Sony would rather be selling HALF the PS3's - and making a small profit - than double the number, at a $100 loss each. But I could be wrong. All depends on how worried they are about the 360.
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The price of BluRay (standalone) players is a separate issue. I don't think the price is high because it costs a lot to make them - instead Sony is trying to MAXIMISE the profit they can squeeze out of the high-end HD movie market (they actually stated this in a statement a while back, and said that they don't want the price of players to drop too quickly - as it cuts into profits).
This is why they hate HD-DVD - they can force Sony to drop prices quickly, by dropping the price of HD-DVD players/discs. A price war can only be good for consumers ;)
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