I believe he was outed because he was too much of a maverick for the corporate sector. He would essentially envision what he wanted to do, and do whatever it took to get there. Which meant that his superiors wouldn't know what he was doing sometimes or that he was working on stuff (or how much they spent on Cell, supposedly) that wasn't approved. That being said, Ken being a maverick like this was, IMO, good for gaming and for consumers, but not good for the corporation. His being a maverick in the first place is how the first Playstation was even made. Regardless, I think the man had a vision (even if it was crazy to us mortals most of the time :lol ) for how things could be and came up with concepts that were frankly too expensive or overreaching for most corporate boards to OK. That is why I believe he was "outed."
On topic, I expect that PS3 would be profitable in 2008, sounds about right. Now if they get 65 nm Cell and RSX in there, they could lower the price $100 by this Christmas and either be losing very little or possibly even generating a slight profit. The slight profit combined with the price drop is very unlikely, IMO.