I think it is an architecture designed for massive parallelism, with all the necessary trappings that go with it, which would only be used for relatively straightforward pipelined computing ala the PS2 with a couple of processing units ... hence overengineered, so yes.
While using the inherent parallelism present in Multi-tasking environments and multimedia applications which ar epart of the PDA world as well as the HDTV world and the game console world ( and more... ) is something Cell tries to do this doesn't mean that the architecture is only limited to Desktops and High-end workstations... to me it sounds like saying that IA-64 is inherently a Workstation and Server architecture which will never fit the Desktop market...
ARM processors, Strong ARM, embedded MIPS, they all have enough horse-power to be fast enough in more "serial" tasks, but they are not very well geared inheerently towards hevvy multi-media applications and heavvy multi-tasking, while Cell would be able to take care of such things quite nicely...
I know you disagree on the Pervasive Computing approach ( and you have your reasons ) and the importance of the role of Cell for Sony and Toshiba in this regard... ( the patent clearly shows that they plan for the architecture to scale from PDA-like devices upwards [in terms of complexity and work load]... )
Limiting Cell to Desktops and servers would seriously limit the reach of Cell...
They specifically mentioned the ease of migration from computer to computer for Apulets, they mentioned how sharing a common ISA ( you cna execute a normal Apulet on any APU ) was going to be beneficial in inter-operating all these Cell based device and how much easier data sharing would be...
I believe Sony, IBM and Toshiba want to see Cell spread around in as many markets as possible ( for Sony [and also Toshiba] it would save them some money, all the Cell R&D budget spent so far would pay off as it would keep the fruits of that work inside Sony helping all its sub-divisions [which could all benefit from using Cell in one way or the other] ) to further create demand for Cell and elated applications...
The chip should use a MIPS core so we would not need to do much emulation work there ( for compatibility with the the ISA used by PSOne's CPU core... ), but I understand your point even if I still think that in PSP or PSP 2.0 Cell would make sense...