Mass production and the maturing of technology will of course drop the price of piece of technology, but what are we saying here, that a $3,000 part is going to be reduced to $60 (an entirely arbitrary figure) in a little over two years time?
Making a console is about balancing the cost of all your parts to give optimal performance. I don't know how much it's going to cost Sony to include BR in a console to launch in late 2005, but much above what it cost them to include DVD on the PS2 it must start having a big impact on the functionality of other areas of the platform.
The benefit that BR would provide to games over increased memory, more bandwidth or faster processors is questionable. Additional processing power can benefit every frame of a game, where as the advantage of not having to swap a disk is far more limited. It's not like the situation where the first N64 games came on 8 meg carts, while CD's offered 90 times the storage (unlimited, if you include disk swapping) at a fraction of the cost.
The comparisons of the benefits of BR vs hard drives are interesting.
While the infinite storage offered by any changeable media is nothing to sniff at, it's important for technology enthusiast not to forget the value of a black box that typical users can just turn on and forget about.
Making the running of feature rich machines as transparent as possible is one aim of consumer device manufacturers. Downloading updates and patches without troubling the user for a disk is one way to make this happen. It also makes it easier to control the material that consumers download - while it's on the box (be it movies or music) it's at the mercy of the content providers. And there's less likely to be the asking of questions like "why is this music that I downloaded to this disk not playable on my friends PS3."
Hard disks are already going beyond 240 Gigs, by late 2005 I expect they'll be double that. BR will make a great technology for a future PSX style device that's based on the PS3, but I think for the moment hard drives offer a greater "mass storage" benefit to games consoles (especially when you take into account the cost implications). And I think that's still the primary concern with what will be the PS3 (at least initially).
NOTE: when I started typing this the last half a dozen posts weren't there! Damned if I'm gonna scrap this post now though ...
Edited more than once, because it takes me several attempts to proof read my own writing.