This is not how consoles work.

You can find the way of making it cheaper, more stable via updates, reduce the noise and energy consumption.

But you can't simply make a better piece of hardware performance wise and call it PS4.

I paid like $220US for a Dual Shock 4 SCUF controller so a beefed up PS4 with BC would be a no brainer for me :P

my entire ps3 library is already boxed up and in the basement storage right where old games belong.

it would be just a view games adding graphics effects. Not higher resolution and framrate 

First off, we don't even know if GCN is a complete superset of the GeForce 7 ... 

Second, the Cell BE doesn't even have H.264 encoder/decoder acceleration so your extra feature like recording longer gameplay footages would be out of the question ...

Third of all, why would any developer want to waste time with the junk known as the cell processor ? 

Day 1 and I would pay $499 for it. It would also be a better experience with the new super lighting fast, fastest UI of this generation, UI. The beast controller, bestest ever made, would be way better too. I hate the stiff d-pads of dualshocks of old. Download managing and game sorting are way better on PS4 too. Just gonna need external HDD support for my 2+ Gigs of PS3 digital downloads.

Just thinking about it makes me wet.

As a person who's never had a PS3 and is hoping to get a PS4 someday, I would go out any buy this TODAY. I'm stuck in this limbo where I don't want a PS4 yet because there's not enough I like on it and because there are still PS3 games I want to play, and I don't want to get a PS3 because there's not enough I like on it by itself to justify spending over $200 just for the system, and because I'm just going to get a PS4 someday! It's a mess, and a BC PS4 would fix all of that.

Also I really, REALLY hate having all these consoles lying around just for a few games each. I've already got my PS2 stashed away for like, one or two games, and I don't want two more systems taking up space.

http://www.legitreviews.com/leadtek-pxvc1100-mpeg-2h-264-transcoding-card_1134

it has H.264 like you mentioned above, its easy to make a software update for it.

RSX is a Gefore 7800 while the jaguar GPU is an AMD 7850-7870. The Cell CPU worked a lot in a way like a GPU, it would be perfect for being a third Physx CPU rendering extra stuff like particles. Look at games like MGS4 or the Last of US and tell me they look like junk? 

Besides has Sony enough man power from studios who could implement extra graphics effects, Nvidia is doing the same so Sony could do that easily for the next AAA game coming out.

Nope, don't need or want that.

I said it for the PS3 and i'll say it again for the PS4.

They should have designed the console with an expansion slot where you basically insert the neccessary hardware of a previous console to make it BC.

That way people could buy the backward compatibility optional. And it wouldn't even matter much what they charge for it.