Actually, including Blu-ray in the PS3 was a very smart idea, it gives developers a lot more space and freedom to work with. Plus, it also help pushing the Blu-ray format.
I know I'm contributing to derailing the thread...but you're right. The BR is a very smart move for Sony in their overall strategy of world domination. But in regard a gaming device, I'm not sure it's a smart move...well, we'll have wait and see how Wii and 360 do.
I believe if Sony released a PS3 with DVD and came to market at the same time as 360 (and priced the same or even less), they wouldn't be in 3rd place. I've confident that they'll the same problem as Nintendo, that is keep up with demand.
Back on topic, it's nice that developers are offering more content, but realistically is that practical? I mean if the 360 had BR or HD-DVD, I have a feeling they would still complain about not having enough room for textures with different weather condition.
The question is really is not whether the developer have enough space, because clearly there are more than one way to skin a cat...And that's the developer's job so solve. The question is whether the content delivered on DVD is enough to satisfy the consumer. Well, basing on what is shown, I do...so far.