Im inclined to believe that this is the only reasonable approach. If Sony does not do this, they really are shooting themselves in the foot. In addition, I have to believe that Sony's cost curve will fall much faster than MS, as BR hits mass production and drops signifigantly in price.
It makes total sense to me that we see aggressive pricedrops from sony around E3 next year. And this consumer backlash you speak of is exagerated, you're talking about 6million early adopters who are hardcore, they'll get over it, meanwhile everyone else will just be happy they can finally pick up a PS3 base unit for $400 or less.
Again, I'm under the belief that this is a calculated move by sony to get some extra money out of the early adopters, rather than something they were forced to do due to high costs. If not, MS is gonna put the hurt on em in 2007.