The PS3 wasn't selling well anyway during the time when the RROD was running rampant and it was because of the price point. If the PS3 had debuted at $600 AND had the RROD (it does have the YLoD problem, which has been coming up a lot more in web forms lately) it would have been dead meat. If the PS3 would have debuted at the same price point as the 360, it would have been fine. People still bought the 360 in droves when the RROD was at its worst. They would have bought the PS3 too.
Don't forget--the mass majority of people who buy consoles don't have any idea about this kind of stuff. They don't read gaming forums to find out about failure rates or hardware defects. A lot of that mass majority is just parents buying consoles for their kids. They're mostly going to look at price. Someone I work with bought her daughter a launch 360, which RRoDed, and her daughter didn't even bother telling her about it. She just switched back to her old N64. She found out by accident, and didn't even realize that MS would fix it for free.
These are the kinds of people who buy most of the consoles--so again, if the PS3 were at a lower price point, hardware defects probably wouldn't have effected its sales too much. But so far price has been its worst enemy, and will probably continue to be.
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