while I admit I indeed thought it was a prank, and I was wrong,
but to get back to the real core Issue:
Why was it done:
this I think sum's it up pretty darn well:
Geohot-
"This is the coveted PS3 exploit, gives full memory access and therefore ring 0 access from OtherOS. Enjoy your hypervisor dumps. This is known to work with version 2.4.2 only, but I imagine it works on all current versions. Maybe later I'll write up how it works
"
he even went sofar as to say this:

while I must take my hat off to GeoHot, you don't say thing's like this :
"Enjoy your hypervisor dumps."
expect a Company to not do every thing in their power to protect their software sales of their software and other's
an when you have Media coverage with this:

PlayStation 3 finally hacked thanks to GeoHot
January 24th, 2010 by
Kyle
It has been more than two years since the initial launch of PlayStation 3, but until now no one has ever succeeded to get full control of the device. Well, its reign over the pirate world is over.
George Hotz (or GeoHot), the author of the
blackra1n jailbreak for the latest iPhone/iPod Touch generation succeeded in taking control of the entire system memory and processor. It took him near five weeks to do the job, after 26 futile months.
He won’t share his methods yet, but promises to reveal everything when it’s completely ready. GeoHot also reports that this exploit can’t be closed by Sony with future software updates, so it will be permanent until they make changes on a hardware level into the future manufactured consoles.
Well, surely it’s a good news for all hackers and pirates in the gaming community. The prices of Blu-Ray discs and burners keep going down, so the PlayStation 3 may follow the Xbox 360 steps soon (getting a huge number of pirated games online).
with thing's like this what would people expect Sony to do.
(getting a huge number of pirated games online).
yes indeed that's exactly what sony and developer's wanted to hear!
but your removing a core function i payed for when i first bought the system. while i do think its regretable that Sony had indeed gave the choice to the consumer between Linux or upgrade and move on, I can understand exactly why they did it, Software sale's are how they recover their cost's, and what little number of software sale's they are getting, is a main priority, if people are making backup's of their game's you know and pretty much everyone know's there will soon be uploaded for people to download. one only has to look at the PSP and it's UMD dump's to see how much Sony would loose on what little number of Software sales it get's than , that would reduce that even further.
Game backup's alway's lead to piracy it just Human Nature.
EVEN IF SONY WOULD HAVE LEFT Other OS function in the ps3 there would still have been the goal of making software Backup's, which would have made it a problem anyway if they were passive about it. This way it make's it that Much harder for pirates to do so.
when you had Media stating something like this:
"Well, surely it’s a good news for all hackers and pirates in the gaming community"
that does not bode well for Investor's over at Sony who may have happened to see something like this story on the internet!
and
Beside's there is still the option of BD-JAVA for Homebrew.
while I indeed think this was Bad for Sony to remove the Other OS function because I am very pro Linux,
At least they are still giving the Consumer a choice to Keep Linux at the expence of loss to their software sales if they would have done nothing.
As a Consumer you still have the option to Keep Linux, but you would loose other function's in the end, Sony is atleast letting the consumer deside how important Linux is to you.