1080p isn't the issue. Most games aren't rendered at 1080p. XB360 didn't support 1080p output for a while too but was never a problem platform. The problem is TV sets that don't support 720p, sets which only support 1080i. For some bizarre reason the designers of the PS3 didn't think to add scaling and suitable 1080i output but left it to TVs to do, which was a ridiculous short-sight for such a famous CE brand!Fact of the matter is, the vast majority of HDTVs installed in homes DO NOT support 1080p inputs.
We've never had real figures on that though, so it's hard to gauge impact. how many sets are there out that that don't support 720p? Every TV sets for years has support the 720p standardAside from having arguably better image quality than the 720p LCD TVs that you see all over the place nowadays, there are probably still a ton of people who use CRT TVs still.