Removing backwards compatibility causes your customer base to evaluate systems based on what your system has as far as new software goes. They treat the PS3 like the 360, and even the Wii, and decide whether the PS3 is a new system they should ADD, rather than a system that is an UPGRADE for the PS2. Considering, in the United States, people can trade systems in and get credit, it also helps you reduce the cost of buying a new system.
Besides this, here is another argument for backwards compatibility: Backwards compatibility gives a console games it can play, in niches that it doesn't have software for. If you look at what happened with the 360, Microsoft went out of its way to make games Shattered States and Dia Seneraku (spelling) work on it, so the 360 had turn-based wargames. It also made sure platformers worked, and got fighting games to work also. Unreal Championship 2 also made the list. And for Microsoft, by doing this, it now has games it is able to resell over Live.
Unless one is hung up by only playing the latest and best graphics (I will say get a PC if that is your obsession), having backwards compatibility is a service for customers, AND also a competitive advantage.