Gotta admit that I didn't read the text (too long :)
I don't think it's a smart move, considering that the PS2 is the bestselling console ever and thus has an absolutely huge library. And there really isn't THAT much on the PS3 so far (no bashing, but it's just very early in the cycle, and for some genres, there's hardly a game).
But I assume Sony know that as well, so I guess it was necessary to reduce the price. European customers are said to be cheap and less brand loyal, so lowering the price has top priority.
Currently playing: NSMB (Wii)







