Once upon a time, the PLAYSTATION 3 was not a game console. A Blu-ray player! An home entertainment hub! It was a super computer! A... Sony Computer Entertainment honcho Kaz Hirai explains:
I think there was some confusion as to what PS3 was initially — some of the third parties didn't understand and they wanted to scale back a little and see how things went before they really put in their resources... But when I re-positioned the PS3 as a video games console at Tokyo Game Show I think everybody got that message loud and clear.
While removing backwards compatibility was shitty of Kaz, driving home the point that the PS3 is a game machine first and foremost was quite smart. That's why they pay him the big bucks!