Crime: 40GB PS3s don't have the 'Emotion Engine' chip that allows them to play PS2 games (unlike the 60- and 80GB models). Playstation says they may potentially never release the software to emulate PS2 games on these deficient machines.
First Problem: Fully-functional PS3s, say with the original 4 USB ports (cut to two) and Emotion Engine chip (cut to... well, just cut), cost a lot to make.
Second Problem: Playstation runs at a loss (at RRP$1100??) with their intially excellent wave of consoles hoping to make it all up on game sales.
Playstation's solution: Release under-functional, crappy 40GB PS3 consoles for RRP$799.
Iain's solution: Release more and better games.
P.S. I've just bought an older, properly-functional 60GB PS3. Well, theoretically, if the TradeMe Seller actually emails me back... it has been over 48hrs now. I'm hoping this means they're just not as geeky as me and are taking their time to email.