Oh man, the VCD player, I forgot about that.. that was an actual hardware plugin though yeah, I didn't think the console needed to be modded to run it. I saw one in an EB years ago for $20 and was tempted, but my fancy $300 dvd player could play VCDs (hahaha, and was the size of a small car). I do remember a "homebrew" porno game that one of my friends bought back from Thailand for the PSX actually lol, ended up with me then someone else stole it, what a laugh.
There's always the "import games" excuse.. but PS3 is already multi-region so it kills that argument.
I read somewhere where people were using the "Yes, now I can develop xyz homebrew for PS3", to which one reply was along the lines of "well that was possible with Other OS... but NO ONE did it, why does it take being able to pirate a game for people to be interested enough to tinker with the homebrew stuff".
RE: the "PS3 still hasn't been hacked".. well I suppose, I guess reverse engineering the thing is an achievement in itself, but I guess it's technically correct that the security cell or whatever it is hasn't been breached.