Many reasons why it's under performing compared to the standard set by the PS1 and PS2, but overall I'd just say the competition picked up this gen. Microsoft took away alot of the 'core' PlayStation fanbase with games like GTA, Final Fantasy, Madden etc becoming accepted multiplatform titles, while on the otherhand Wii took the more casual side of the ps2 - the people who bought the thing at the tailend of it's life for games like Buzz, eyetoy, guitar hero etc.
360 and (to a lesser extent) Wii still don't have so much of a presense in mainland Europe, where PS3 is still going pretty strong, simply because Microsoft and Nintendo don't seem to have that much commitment to those areas. In say, the UK, where they are ever-present PS3 again is really underneath the president set by the PS2, due to competition.
Of course the launch price (And continued highest price now) didn't help one bit, but competition for me is the over-riding factor here.
What can Sony do? Not much more then they're currently doing, imo their focus should be to establish as many strong IP like Uncharted, InFamous, Killzone etc as possible ready for the PS4 launch, so that when that finally does come about they'll be able to boast a list of exclusive that Microsoft simply won't have (Unless they bolster their first party).