I agree.  I actually think that Sony realized that the PS2 was hurting their sales, so they dropped the backwards compatibility (so people would buy the more expensive PS3 version instead) and will at some point realize that the lack thereof is now hurting the console.

I have both the PS2 and PS3, so I really don't care too much, but a lot of people do want B/C to be re-introduced onto the PS3 entry level systems.  (at least my friends in real life want it).

I heard clerk at GameStop explaing that the PS3 won't play a customers existing PS2 library (after Sony had promised you keep the games you buy for life) and they decided not to buy a PS3, but the 360 instead. The game selection is almost the same to an average customer, but the price is NOT. Having B/C made you invested in the brand.

Bringing it back later might be too little too late (though I hope not)

@NJ5

Agreed, Microsoft has son exactly where they want them, Sony focused too much competition on Microsoft and lost thier way. This reminds Me of the whole Sega and Nintendo rivelry, then in came sony and rushed right pass them, delivering not only cool games, but every type of game they could. This time it nintendo who has dont the exact same thing to Microsoft and Sony.

Except that sony is doing it in a minute and a half...

 I think Nintendo (and especially 3rd parties) have squandered some good will here as well. If there was a wider variety of games on the Wii, then M$ would not be doing so well this holiday season either. Nintendo focused on the Blue Ocean, but the core are starving. That's why 360 has played the game right down the middle. Nintendo does have core games for 2009 (IGN revealed yesterday that 3rd parties have quite a few exciting unannounced core titles for Wii 2009), but the core are not thrilled with Nintendo. I don't know how that will play out, but that's not the topic of this thread anyway....  

fixed

I totally agree with those who earlier said that the biggest loss is consumers' perception. Let me tell you an example.
I live in Italy which until recently, you probably know, has always been Sony's land. What you probably didn't know is how powerful their brand was. Most parents and casual gamers used to call "playstation" any console; the xbox or the gamecube where a different kind of playstation and among young people who you were cool only if you could play the last GTA or Tekken on playstation 2 (and earlier 1). When I tried to talk about other consoles with my friend to make them understand that the xbox (and in part the xbox360) or the gamecube had their good games and features, the only answer was "but the playstation is better!". At the time the Playstation 2 launched, even if the price was really high for the time, half of my friend upgraded almost immedeatly. Playstation was a synonim of "videogames". When the playstation 3 launched, not even one of my friends bought it for 2 main reasons: the ps2 is still cool and the price was too high for gaming. They didn't even care about Blue ray, they wanted to play the new games and they weren't there. No final fantasy, no gran turismo, no tekken, no gta and so on. Some statistics (among my best 14 friends and I):
6th Generation: 12 had a Playstation 2, 1 had a Gamecube, 1 had a Xbox, 1 had nothing.
7th Generation: 2 have a Playstation 3, 4 have a Wii, 3 have a Xbox 360 while most of the others play PES 2009 on playstation 2 for now.

My thought is that Sony eventually releases a  BC emulator and "assumes" that the 6 people who have not upgraded will choose the PS brand to keep their old games and get BluRay to boot. 

This strategy could be ok if your friends all want to keep thier old games, which is why the PS2 is still getting new releases. If this strategy works, Sony could have a huge bounce (especially in Europe/Others). But even with a strong bounce, the other consoles are all recognized, and Sony has lost the stranglehold it had on the market.

This plan is probably the best scenario for Sony. I don't think they expected a $200 360 (cheaper in Europe) that would get simultanious releases of the staple PS2 AAA third party software (FF, GTA, Tekken, etc). Or that the Wii would change the way games are played and take away not only all of their family fare content, but regain former Nintendo staples that had moved to Sony consoles (DQIX, DQ X). Or PS staples like DDR would just skip the console altogether.

So it is really too soon to tell. Who knows what Nintendo and M$ will do when Sony is finally able to lower the price to the PS2's launch price. But I know it will be interesting to watch, and analyze.

The problem with adding/removing PS2 compatibility or any features is the flip flopping. It causes consumer confusion and resentment.

Sony is going after PROFIT this gen, and a little Too early.
Usually first 2-3 year console is selling for loss, then next 5 years they make money on it.
This time Sony decided to stop losing money already on 2nd year, instead of making a pricecut.

They were confident in AA GAMES and they would SUCCEED IF not a CRISIS.
During crisis people prefer to buy what is cheaper. =)

Yet, THIS gen does not end with 2008. :)
PS3 FTW!