Sony: An inside job?

Is someone trying to kill the Playstation brand from the inside?  I can't think of any other reason Sony would keep making stupid move after stupid move.  Some political battle inside the company, perhaps.  Why else would they keep doing this to themselves?

The latest boneheaded move:  The new PS3 40gb model drops backwards compatibility completely.  You can't play PS2 games on it, or even PS1 games.

They've always been arrogant about the PS3, but this is beyond arrogant.  With only 65 games on the market, and so far fighting a losing battle, they've removed one of their biggest features, and one that really doesn't cost them that much.  Why?

Check out Sony's explanation.

This new PS3 might sell as a Blu-Ray player, but I can't see gamers going for it.