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It's not a fail, inconvenience? yea. But with a bunch of things you always run out of space and you can either delete stuff or upgrade. With a PSP you run out of space on a MS, you delete stuff or get a new stick.

At least they enabled you to have the ability to upgrade the HDD. That is a plus in itself.
You payed cheaper for the 40GB HDD PS3, you get what you payed for.
Now Sony raised the size to 80 GB on $400 models, and there is the 160 GB Uncharted model if you wish to pay more.

IMO: Sony is spot on.