"Everyone that was using OtherOS.."
Erm, this does not bring OtherOS back... There is no reason for this modchip other than piracy, that is the bottom line.
They are trying to get gamers on their side by spreading FUD... I'm suprised they havn't used the lame Lik-Sang line yet... (the obscure fred-in-the-shed outfit that Sony closed down for selling piracy devices a few years back).
Even the "legal backups" is a dubious excuse considering all Blu-Ray discs have a anti-scratch coating, and it's VERY hard to damage a Blu-Ray disk.
There is no way on earth the PS3 modchip will ever be sold in the UK, what with the Nintendo R4 ban being so fresh in everyones minds... This is no different at all (well it is different of course, as the PS3 Modchips days are numbered... I'm guessing Sony have a firmware ready to roll as soon as this courtcase is resolved one way or another)