@ kowenicki
I am a tech enthusiast, less a sales enthusiast, pricing comes down in due time and thus sales can pick up.
Sales need to be enough to make sure the high tech games I am interested in actually materialize, but they are not crucial beyond that.
For example someone can really like the Neo Geo for the tech and amazing games it provided for its time, despite its high entry pricing and low sales.
Nomatter what, I wouldn't have wanted the Neo Geo to have been specced like a Sega Mega Drive, I loved their arcade games far too much and that would absolutely have sacrificed quality. Why would we have needed two Sega Mega Drives, for example? Or for example the Atari 2600 was pretty sucky compared to the Coleco Vision, etc (but sold more and was cheaper).
Personally I wouldn't have been interested in a PS2.5. The PS3 now sells at 300 dollars, I don't think that's expensive. Looking at the big perspective Sony wanted to create a console which could last them a decade and help bring excellent content for HDTVs and surround audio systems, a PS2.5 wouldn't have been beneficial to their bottom line with wanting to advance the consumer electronics market.