The PS3 doesn't have to beat the price of stand alone blu ray players, if blue ray demand decides to pick up (which it will not for a couple of years). It only has to be close enough that people say, I'll pay an extra $50 or $100 and get a PS3 to do both.
Right now the value of blue ray is closer to $0-$25 for most people, as they are not very interested in it. That value will grow.