First, Mike, there is an "EDIT" button. Use that to add stuff on the previous post instead of double posting or quoting yourself. Double posting on purpose is against the rules.
Second, you are suggesting that Sony take the route of OnLive and do game streaming instead of releasing a new console? Lets consider this, shall we? The delay from the server to your machine, depending on location of the server in relation to yourself, would be at minimum about 10ms. Add on to that the delay of wireless internet to the PS3 and the minimum would be about 30ms. Then you have to factor in the delay of the controller input to the machine and the delay from the input to the action on screen which would total well over 100ms. Then you have to factor in round trip so you are looking at the VERY MINIMUM of 260-300ms, but most people would see delay of 70-80ms from the server so all in all the average to maximum delay would be 340-500ms delay from giving input and receiving the streamed action response on your screen.
By your best estimates, this infrastructure needed to have fast enough internet will not be until 2016-2020. The next generation of consoles will be out by 2013 to 2014 at the very latest, all except for the PS3 if they were to foolishly follow this idea.
Oh and one more thing, nice way of trying to make it look like internet in the US is progressing slowly and awfully compared to other countries. You do realize the US is much larger and has more rural areas than Japan by a long shot! Probably at least 30 fold larger than Japan. The speeds available in urban areas are great, and the average speed of internet in the US has actually been increasing faster than Moore's law since 1998. All it will take is some investment into getting fiber across those large open areas of the US, but that's a pretty hefty investment when not many people live there.