FAIL
2.5 + ODD isn't significantly bigger or hotter or heavier than 3.5" + card reader, plus you have the insta fail of ignoring the ODD movie market, which is still an order of magnitude bigger than the DD movie market. That $100 cost difference estimate is just as absurd as your $400 6-core 300W space heater console estimate. At most the cost difference is $20 bucks.
There is no fail at all. It has nothing to do with the heat given off by the optical drive and the 2.5 inch drive vs the 3.5 inch drive and card reader. It has to do with the volume consumed in the case
http://guide-images.ifixit.net/igi/yGyDbybL2EXvsbjH.medium
Take a look inside the 360. Look at the volume of the OOD inside of it
and here is the slim ps3
http://guide-images.ifixit.net/igi/be1bSIBJJAk1dEvk.medium
and the original
http://www.llamma.com/PS3/repair/disassembly/PIC_0030thumb.jpg
Removing the 2.5 and ODD and replacing with a single 3.5inch hardrive would alllow for a more optimal cooling path and a smaller case. You no longer have wasted space in the console
That's absolute economic suicide. Not only you're not going to get 16GB for 5 bucks in 2 years, but if you want to see the absolute best case on how a console with smaller and more expensive game storage performs against one with optical disc, look at N64/Gamecube vs. PS1/PS2. $5+ difference will make a lot of influence on the consumers' choice of console and sales. Console manufacturer would have to eat it unless they wanted to get left behind in the dust with their console.
Why wont you. Look Sandisk and toshiba are going to 3bit per cell tech and it seems intel and micron are moving to sub 25nm processes this year which will make 16GB 2bit per cell dies avalible .
According to intel on 24mm process it would take 64 dies to make a 256GB ssd and with the 25nm process that they are ramping up now it will be done with half the chips and that at a die size of a 167mm2 a 300mm fab will produce 400 die per wafer or $ 4 per chip basicly .50/GB . 45nm nand would be 1.75/GB
http://news.micron.com/releasedetail.cfm?ReleaseID=499901
intel/micron's 3bit nand flash memory chip is only 131mm2 and is 20% smaller than the normal 2bit they make on 25nm.
Also as I already said things are diffrent than the n64 generation. N64 carts were $20-$40 per cart to program and you had to go to nintendo to get them. They were also limited in size to 64megs i believe. Cds were $1-$2 and held 750MBs . There was no contest.
Heading into next generation we see 8 -16 gigs of flash ram costing less than $5 and the price continuing to drop. Even if limited to 16 gigs at the start of the generation you would only be 3 x the data behind . With the n64 you were 11 times behind.
Going to flash would be a plus for consumers. You'd have much faster load times , a quiet system , a smaller system , and the console manufacture can move to a 3.5inch drive and offer multi terabyte hardrives vs hardrives in the hundreds of gigs and the downloaded content would play faster .
Not only would you have faster load times but you could also have much better games due to the developers being able to refresh the texture ram multiple times vs the optical drive.
Remember its not just transfer rate. A disc drive would be much slower at seeking and you'd have a speed decrease across the disc , switching layers and of course as the disc drive spins up and spins down.
You'd then also have a longer life console as flash has no moving parts and the flash ports would have no moving parts. There is also no noise.
I think many would pony up $5 more for a next gen game on flash vs a next gen game on optical