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I'm not a lawyer or anything, but I don't really think you have a case here. You don't have to update to 3.21 if you don't want to, and you're PS3 will still work as described when purchased, in that you'll still be able to use OtherOS.

When you sign up for PSN you click an "I agree" button, which is like an electronic signature, that states that you agree to their terms and conditions. I'm pretty sure somewhere in there it states that they can change PSN at any time they wish, etc. So, you really don't have a "right" to use PSN if you don't agree with their conditions. So if you don't update, you don't have the right to PSN.

And aren't you using the OtherOS to run emulators. How legal is that?

I understand your frustrated, I'm just not sure you're going to get very far in a lawsuit. Although the things you're asking for are pretty cool. I'd love to have multi-regional PS1 and PS2 support.