Think back to 1997 and consider what a highly powerful, fully functional, personal computer that cost $300 would mean to the home computer market? Now, to a certain extent it seems silly to think of the PS2 in this way but (early on) Sony claimed that the PS2 would hook up to a printer and have a productivity software suite.
At the same time the internet was (really) only starting to take off and people believed that television based interenet access was the "way of the future", and Microsoft was working on delivering "Television" through the internet.
A lot of these ideas were (probably) not followed through on because at the time TV resolutions were too low to allow for many of these things to work, which is why you're seeing these features creep into the XBox 360 and PS3.
