The PS3 is retarded because Sony no longer understands what the Playstation actually is. Ken Kutaragi (the "father" of the Playstation) has never approached it as a toy: he's always approached the situation like it's a war for the living room. Rough translation: like a war to gain Sony's media empire more market share.
This is a war Sony is going to lose. They are great at making specialized products, but they suck horribly when it comes to this kind of swiss-army-knife-multimedia bull****. You can see it in the PSP and even a little bit in the PS2. And no, nobody can deny that the PSP would have been a much stronger gaming machine without the overriding focus on multimedia.
Hell, Sony is so abrasive and unfair to other companies that they bought their way into multimedia for the express purpose of pushing content onto their halfbaked proprietary formats.
And in the end, Sony has next to no industry support whatsoever. The carpet is being pulled out from under them in a major way. The only game companies that still really support them are Japanese, and thanks to a combination of factors the Japanese game market is fading into complete irrelevance. (Negative market growth in Japan among other things).
Microsoft, on the other hand? They're not much better, but at least they know what they're doing. They used established technologies and asked actual game developers if their console was going to be retardedly hard to develop for. When they said "Yes [ but at least it's not Cell!

]", Microsoft worked on creating tools to make their jobs easier.
And, in addition to that, Microsoft is probably-illegally using their home computer dominance to back up the 360's multimedia features, which is something Sony simply can't do.
You can call this anti-Sony propaganda if you really feel like you have to.