I always thought it would just be there for mainly BC, and maybe as an audio processor. Surely a 1PPU4SPU with more memory, and combind with the rest of the hardware could accomplish being fully BC with PS3 games. Might require some emulation. Is that not possible?
Yes, it is technically possible. They can even use it to handle security, process Kinect and other natural input devices. However, it may not make economic sense. They can use the budget to beef up their new architecture for example.
In other words, it may be more efficient and effective to reuse the Cell principles (Data locality, pipelining, many cores, etc.) in the new environment.
As for backward compatibility, as long as it makes business sense, Sony will (have to) figure a way out. e.g., port them like today's HD collection, sell an additional B/C module, or stream it in the future in markets where the network is robust enough.
Yes it would increase motherboard complexity. but so did having GS+EE on the launch PS3 motherboard.
Can anyone comment on why the PowerXCell 8i might of never been considered? The thing seemed like much beefier and better designed Cell, and surely a modern updated revision of that today would be quite capable, no?
PowerXCell 8i, Super Companion Chip are designed for a different market.