Anyone know or care to theorize why they took this feature out?

I can't imagine it saved anything in terms of cost, as it's purely software.

It's a REAL pita actually.

So why!?

My suspect is that they did this to prevent some blu-ray piracy feature in development, but Im not sure.

Someone here posted that quite some companies bought a ps3 to use its processing power (with linux). But they don't buy games at all, so these sold PS3's only brings losses to Sony. If that's correct, the slim won't be breaking even in a while (HW only).

I thought they allowed other OS such as linux to be installed because Sony wanted to classify the PS3 as a computer rather than a consumer electronic devices so they can take advantage of lower taxation especially in some European countries. My guess would be that countries closed that loop hole or the tax level is the same for computers and consumer electronics.