The reason, averyblund, is simple: the rules of the industry for the last 20 years had it stated that a console will experience its most significant sales after it reaches a "mass market price". The reality of this (that the mass market was only willing to pay $200 or less for a video game system) of course was conveniently taken for granted. The question of why it held no higher value even as the value of money dropped never really registered.
The reality of the situation, if you look at the trend, is that the market had entered into a state of value entropy. The real value of a console to the average consumer was actually dropping constantly. Even as other products raised in price, people at large still saw video game systems as not worth investing more than $200 in.
So the mantra emerged that $200 was the market's "sweet spot", without any consideration as to why this was. But now that mantra no longer applies. Or rather, it only applies to consoles which follow the "old" values, and not to any great extreme. One thing that people conveniently forget is that the $200 price point "sweet spot" only ever helped the console that was already "winning". The XBOX didn't exactly fly off shelves at $200, and the GameCube launched at that price and only went down, to lacklustre results.
The short of it is that a drop to $300 (or even $200) isn't going to boost the PS3 into the stratosphere. But it's a convenient idea to latch onto since it appeared to work in past generations, as long as you didn't look at the cause behind the effect.
