On the main topic, I seriously doubt that they're actually going to phase out the high-end models. Not because it would piss off millions of consumers, as I don't think that would stop them, but because the expensive models have a better profit margin for them. I don't know how much cheaper the 40 gig is to manufacture, but it certainly isn't the $100 we see on the retail price tag. Sales of the 80 gig subsidize the cheaper model.
"When you say "features" the key elements that are missing is going to be an element of hard drive, but that has come about because of the research that we've done as to what is the required amount that is used at this stage; the type of user that is using a PS3. And then yes, the ports have been taken out so there are only two USB ports, and then of course the memory stick ports have been taken out."
I also think it's hilarious that he completely ignores the one missing feature anyone actually cares about, backwards compatibility. There's "being careful what you say" and then there's "denying the elephant sitting on your lap." I don't think you're fooling anyone with the latter.