They didn't reduce any costs by removing the OtherOS feature from the slim. Whether they removed it because of security risk suspicion even at that time, or whether they wanted to ditch it from the old models as well in a while (because only then would they lower the costs associated with it) is anybody's guess unless internal docs about that decision were to be made public.
Geohot's hack did a Hello World!, or rather a Hello geohot line, it didn't run any game copies. It contributed to OtherOS being removed from the old models, but once again maybe it just contributed to it being removed as early as it was. And removing OtherOS wouldn't have required any massive development, GameOS didn't depend on it in any way. It was OtherOS support that had to be updated when something major was changed in the FW, hence any costs associated with it.
