I am a sony fan too, but having said that, its not really the sony software that makes the PS brand appealing, its the japanese third party stuff.
I think Sony were just incredibly lucky with the PS1, Nintendo were dragging their heels as usual, they were reluctant to bury their highly succesful SNES and this gave sony a chance to wow everyone with some of the biggest changes in the industry. The PS1 had alot of wow factor that just came with the fact it used CD rom, nothing to do with marketting or system specs, this thing used an exciting new medium.
On top of this, sega (like nintendo) couldnt compete on price, they HAD to make a profit and so the saturn was uncomfortably priced at 1/3rd more expensive, on the back of their last few failed add ons, this wasnt good at all.
Sony were trendy back then too, (we had Sony walkman, not apple iPod), and they marketted the PS1 accordingly, it made gaming cool again, if you didnt have a PS1, you just wern't with it!
I think the general failings of the competition just gave sony the chance to run away with it, and with squaresoft onboard and the backing of almost every major software house, the had it made. I think piracy also played a HUGE part in its success over the competition too.
The PS2 pretty much rode the wave of the PS1, Again it had a new disk format that people wanted, it had the promise of all the same games that made the PS1 so great, it even played PS1 games so you didnt have to wait for a stella PS2 game to come along. Again, there was very little competition, sega were dying off under the weight of the PS2's hype well before the machine was due to be released, thanks to the PS1.
Now in the case of the PS3, they made a few key errors, this time the were puching a media format that people didnt really want, or atleast they were unsure about. They are pushing a Hd machine to a market that mostly doesnt even have a HDTV, and on top of this, we are expected to pay an incredibly high price for all this.
They were pushing the same games, but this time the improvement in graphics wasnt half as impressive, added tot he fact the 360 was already established and was doing these same games already.
I think the tables pretty much turned back in nintendos favour, the reluctance to invest in a new HDTV, a new disk format and and at such a price made the wii a safe bet for alot of people and the 360 just helped matters in that direction, chipping away at the hype that was so easy to push the previous 2 generation.
I dont think the PS3 will in anyway destroy the PS brand, but i think it will teach sony a big lesson, the same lesson nintendo recieved with the last 2 generations.