Sorry, Danny B, you fail.
20+ years as a professional in IT, graduated with honours in Computer Science given by a very well respected Computer Science department, and a gamer since before most commenters here were born. And I'll just point out that the only feature removed from the firmware was the OtherOS ability. PS2 compatibility was a hardware feature and when it was removed, it was removed as part of a price reduction in the hardware. So people had a choice with regard to the only significant feature removal from the hardware. With regard to the removal of OtherOS, people had/have a choice as well, the continued existence and function of various PS3 super computing clusters proves that. No one (except you) is equating Linus with piracy. All I see is a lot of people very reasonably pointing out that the vast majority of people who hack their games console to play 'backups' obtain those backups either via torrent, or by copying a friends disk and then starting the game using a donor disk of their choosing.
All the moral outrage on behalf of the Linux community is somewhat forced since Linux isn't an issue with game piracy. Hacking a console to do more than enable a boot loader for Linux *is* an issue for piracy. Any reasonable Homebrew enthusiast acknowledges that the hacks that enable them to produce custom applications are primarily used to play unpurchased (aka stolen) copies of games.
As for the part about buying a PC to run Linux, I agree whole heartedly with that sentiment, the PS3 is a fairly poor Linux platform thanks to the comparatively tiny system memory and inability to access the hardware directly. I get that some people (a relatively *tiny* number are interested in PowerPC anf Linux, but there are better platforms from that point of view as well. OK, if you're desperate to program the CellBE, it's the only realistic choice, but the number of people wanting Linux on a PS3 so that they can code specifically for the CellBE is almost as small as the collected staff of the computer departments running PS3 super computing clusters.
Most of the faux outrage being developed here is coming from pirates who are not happy, slightly anarchistic hackers who seem to believe that once a piece of software leaves a developers finger tips it's their toy to screw with and people who still believe that Sony invented DRM, or that Sony invented and developed the DRM that BMG used on their CDs.
First of all, The majority of people that are affected by this are game pirates and people who want to cheat online, so who honestly gives a crap about thieves and cheaters? Secondly, commercial software can only exist as a viable product because of licensing agreements, and that includes the license agreements governing console firmware and games. It may offend the libertarian souls of the more anarchistic minds out there, but without license agreements and all the other elements of software licensing, no one would get paid for their software, and no one would write anything new. Finally, the usual bogey-man that people raise against Sony, the infamous DRM rootkit affair. In fact, the DRM software wasn't developed by Sony at all. In fact, it was a 3rd party solution, already developed. That was offered to and selected by BMG, but let's not let the truth get in the way of anything shall we?
I'm not sure it's defending Sony to point out that if you broke your user agreement with PSN, you have your service terminated. It's all laid out in the Terms of service you agree to every time you go online. It's not defending Sony to point out that game (and movie/music) 'piracy' is in fact theft. It's not defending Sony to point out that cheaters are scum and disrupt games and service for everyone. It's not defending Sony to point out that this is no more than Microsoft has already done, and was completely inevitable ever since the first major hack of the PS3 was published. How is it defending Sony to point out that in fact the removal of OtherOS was preceded by GeoHot cracking the Hypervisor on the PS3? How is it defending Sony to point out the simple fact that hacking of the PS3 did not (I repeat NOT) only start after the removal of OtherOS. In fact hacking began almost immediately it was launched. The biggest 'break' for the hackers was the PS3 Jailbreak, and *that* was accomplished with a stolen USM service key that was cloned and disassembled. That led to the fail0verflow guys breaking the chain of trust and reversing the old private signing key. The methods and techniques used by Fail0verflow were then co-opted by ego-manchild GeoHot to deduce the metldr key. There are probably a few additonal highlights I've missed, but the point is that OtherOS was removed after a significant hacking achievement on the PS3, as a response to that. The hacking of the PS3 was ongoing already, and the PS3Jailbreak was not done by a high minded 'security researcher' it was a money grubbing individual who wanted to make a quick buck selling the USB keys.
You know, having principles and paying attention to fact doesn't make you a Sony defender, that is a label applied by people who find the truth inconvenient.