I see a lot of people arguing over whether you have certain rights, etc, regarding services and things like that. But I don't think this is a matter of rights to services.
If Sony simply prevented access to "new" services, nobody would have a problem. But the fact of the matter is, Sony sold their systems with the understanding that it would have certain functionality. Having an update that forces owners to choose which of two bits of functionality to drop turns it into a case of false advertising. And this is the argument that should have been put forward (I am assuming that there are laws against false advertising in America, as there are in Australia).
For those who are arguing in Sony's favour, let me ask you this. Suppose that they released an update. With this update, you are given a choice - give up the ability to play any game released before 2008, or give up the ability to play any new games, access any online functionality, or download any games. Logically, this is the same sort of situation as the one that really happened, with the only difference being the specific functionality being blocked by the update. Is Sony still within their right to do this?
Should the judge have thrown the case out? Probably... but not for the reason that Sony fans are putting forward. I'm guessing that they were suing Sony for the wrong reasons, lacked legal justification for the suit, and thus were going to lose anyway. This doesn't mean that Sony wasn't in the wrong, nor does it mean that a valid suit shouldn't go ahead.
Note that it would be a somewhat different situation if there were some additional functionality that was being exchanged for the lost functionality. If Sony simply made it, for instance, so that any title requiring Move wouldn't work on a system that still had Other OS functionality (assuming the Other OS issue came before Move's release), nobody could really complain, because purchase of a PS3 doesn't come with a guarantee that all peripherals will work with it. Therefore, the removal of Other OS would be part of a modification of the contract, with each side gaining something out of the change. This would, however, require that those keeping Other OS functionality didn't lose any online/download functionality or ability to play non-Move games.
To put it all very succinctly, if Sony removes functionality that may have influenced purchases (note the word "may"), and the only way to keep that functionality is to lose other functionality that may have influenced purchases, then Sony has committed false advertising.







