You're right. Nintendo could carry their system by themselves.
The PS3 strategy is predicated on 1st party killer apps selling the console. And one wonders where that leaves 3rd parties. Their games clearly aren't selling and they face increased competition from Sony's internal efforts precisely because Sony is in a panic and feel they can't rely on their third parties to provide those titles for them.
It's a vicious cycle. The fewer units they sell, the more Sony feels they need to fund 1st or 2nd party exclusives. And the more 1st/2nd party exclusives Sony funds, the less interest 3rd parties have toward the PS3 given the economics of publishing on that platform.