Thing is, for all those arguing motion sensitivity is better than rumble, as some people have already stated the best route would have been to go with both. Losing rumble, regardless of your thoughts on it, is a loss of a feature and a step backwards.
I was reading an issue of PSM2 (UK Playstation magazine) the other day and there was a long-ish article on the creation and importance of the original Gran Turismo. One of the most important factors in the article was the interaction between GT and the Dual Shock controller, how strongly each complemented each other and how much it added to the Playstation at the time. As I said, regardless of your personal thoughts on rumble, it is a feature that had strong importance to a lot of people in the past and has become a staple for both developers and gamers, yet is something we are not going to see from launch and are currently unlikely to see at all in PS3.
As regards cost and feasability, I think it's all a smoke-screen personally, Sony are annoyed with having to pay Immersion anything and if they have to settle this they seem to be being a little petty and don't want to have to pay them anything more afterwards.
The guys from Immersion have already said they can get rumble working alongside the motion sensitivity and said so publicly, so I'd be inclined to believe them as if they weren't sure and Sony had taken them up on it they'd look a little stupid if they couldn't. I'd also think that Immersion would have a good go at making it cost feasible as even very small royalties per controller are better than no royalty at all...