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If it's the big issue some are indignantly proclaiming it to be, here's what you do: snap up all the old PS3 units you can afford (most being used since they've been out of production for months) and use Linux on your PS3 cluster or collection of PS3s (if don't have the technical knowledge to build a cluster) to your heart's content.

Barring the Air Force and organizations using the PS3 for research purposes, I'd guess that about zero people will be doing this.

From a legal standpoint, a ToS is drafted by a company's team of attorneys who specialize in legal documents and agreements and will typically be airtight. Any major corporation or business will do this. They're not written by a bunch of game and hardware developers sitting in a conference room throwing in random suggestions to add to the document ("if the user agrees, SCE is entitled to the first slice of every pie containing rhubarb that said user purchases").

You can still use Linux, you just won't be entitled to any further update services as the previous firmware will no longer be supported.