They don't need to close a functionality gap at all
Why do they even need this? The console is a good 100 quid cheaper than the PS3, and its starting to hit the point where you can buy a dedicated bluray player for around the 170 quid mark.
90% of all titles are on both systems showing that the extra capacity has yet to show any real benefit beyond HD soundtracks and Hi-res cut scenes.
Its a games machine, it plays games. Sticking to this line of thought certainly isn't doing Nintendo any harm.