I'd say the removal IS to cut down costs of the PS3.
While backwards compatability may matter to gamers, the $400 PS3 is being targeted to people looking to upgrade video format to HD viewing. Sony is pulling out this new model, making it the cheapest BR player that they offer.
They are bundling it with a BR movie people will be looking for this holiday season- Spiderman 3. "Upgrade from DVD to BR with our cheapest model available and get a free copy of Spiderman 3."
At the same time, Sony tells gamers that, if they want the PS3, they can have it much cheaper than before. However, quite a number of potential PS3 owners will draw parallels to the previous 20gig model; $100 cheaper, but missing many key features.
The sales of the $400 PS3 model will be driven, mostly, by movie enthusiasts upgrading to HD movie viewing. Sony gets to tell their shareholders that the PS3 sales have increased, and that they should continue to invest. Third party developers see that the PS3 picked up some steam in the holiday season.
I've been saying this for many months now, when the MS originally suggested that Sony would bring out a $400 Gimped PS3 for the holiday.
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