I disagree.
Here's my theory: Business-wise, what's better for Sony in the long term? Doing well for another game console generation for 6 years, or establishing dominance of the entire home video industry for far longer? They decide the latter, they say "fine, we'll put a cutting edge technology on the PS3". You stick a high-end (for its time) Blu-ray player that boosts its price to very high prices, now they have to sell it using the "posh, high-end premium hardware" angle. So that's how they play it. They stick in an exchangeable hard drive, 6 USB ports, 2 HDMI ports, SD slot cards, touch buttons, an entire PS2 inside it, etc. to really make this obvious and justify the cost. In other words, they build the rest of the PS3 around the Blu-ray play because business-wise that's where the money is. Of course, they try to sell it as a gaming-related medium, playing the whole "good storage" angle, etc. They additionally take a hit (IIRC they sold the PS3 at a $400 loss initially) and bring Blu-Ray drives into as many homes as possible.
If you believe this, a lot of their other behaviors become all the more obvious. After Blu-ray "wins" the format wars, then they focus on the PS3 as a gaming console. They strip down the console little by little, trim back on everything from the HDMI ports, USB ports, touch controls, PS2 hardware, etc., and start aggressively dropping the price as much as they can. After all, if they were trying to sell the PS3 as a high-end device in the long haul they wouldn't have made the PS3 visibly cheaper later.
Now look where they are. PS3 is in "last place", but it's hardly Dreamcast'd. The console played a big role in making Blu-Ray the established next-gen video format, and now they can use the brand to focus on other things. Using it to drive 3D, for instance, is another one of their ventures although it's not as "invasive" to the console as Blu-Ray was.
So there's my theory. I know a lot of people like to think Sony went stupid, but honestly on a business sense Sony isn't stupid. They didn't get to this point in the industry if they made stupid decisions and they most definitely didn't put Blu-Ray in the PS3 for gaming purposes. I find my theory far more plausible than "Sony derped, now they're in last place".