My understanding is that the "battlefield graphic murder" online simulator games are quite popular and they've had a problem with cheaters. Players have built up quite a rage against these cheaters and they look to Sony to fix it.
When hackers come along having the goal of running their own OS on the PS3 or even restoring the ability to run as a guest of the hypervisor (OtherOS), many players don't see the difference. Probably any research into the inner workings of a PS3 has the potential to benefit cheat development as well, but I for one do not accept the idea that we would turn off our inquisitive nature and forgo our home supercomputers so that others might gain a more fair killing field.
But I think you need to respect the opposing viewpoint: that supporting OtherOS actually isn't worth the risk of new cheats for a lot of people. It is a game console after all.
* It's not a "game console" by definition. It's a box with semiconductors inside it which I can purchase for a few hundred bucks at any of many local stores. These semiconductors are equally well-suited for doing vector calculations in support of many applications, frivolous and serious alike.
* It's simply a mistake to think by not "supporting OtherOS" it will significantly reduce the "risk of new cheats" in anything but the very short term. OtherOS is happening whether it's supported or not. That's probably true of cheating too.
* But that's not even what Sony did though, Sony actively removed OtherOS from units people had previously purchased, and only then _after_ it had already provided its (relatively small) boost to hackers.
The idea of keeping secrets locked in a box that millions of people purchase and physically control is simply ludicrous and has failed every time it's been tried.
How many days out of the last year was the iPhone not jailbreakable without even opening the box?
And to be fair, the Dreamcast was about as open as a 7/11, but that didn't fair too well for Sega.
A. Reality does not owe us a successful business model. Thus even if we accept Sega as an example of a failed open console, it says nothing to imply that a closed-console model is a viable idea.
B. Disbelieving (A) is usually a quick route to failure. Apple is good at getting its customers to accept unreality, but does a pretty good job of understanding the reality for itself. (Perhaps this is why they react so violently to cracks in their reality distortion field.) Often companies begin to believe their own reality distortions with disastrous results.
C. The vast majority of businesses fail anyway and the console industry is particularly competitive. Like Nokia in reverse, they recognized their own ability to make a business out of hardware systems and remained alive in a different market (hedgehog simulator software). If they knew they were the weakest player in a market that would only support a limited number of systems, would a more-closed architecture really have saved Sega consoles? What if they had started making open-architecture DVRs or home theater PC boxes instead?
Are there any postmortems on the Dreamcast and why it failed? I'm genuinely curious. I don't know if the openness of the Dreamcast led to its downfall, but it has a fairly strong community of hackers using it currently.
The best I can muster. Being a fan at the time, I tend to follow the "it needed more third party support" and "Sony lied/"used false PR" (which seems oddly more acceptable) to hype the PS2 into unrealistic levels" lines of thought. Particularly the latter, claiming video as "gameplay."
You really get the sense that success in that business (at least at that time, in the minds of the executives they interviewed) is about everything except delivering the best possible value to the customer.
As a gamer, it annoys me to no end how people are quick to defend and identify with companies that have even a hand in their favorite game. Many will even defend publishers of games they enjoy in unrelated matters, as if the publisher had anything to do with it.
It truly makes me wonder sometimes about the person on the other end of the keyboard when this kind of personal data breach is written off completely, laughed at as no big thing. I mean, I don't even have a PS3 or PSN account (waiting for Team Ico's next game,) but I can tell it isn't "nothing."
Really want to be disappointed in gamers? Google Image search "Modern Warfare 2 boycott".