Sony gaining out of a long lawsuit with really just winning and saying hacking is bad?

They are trying to discourage others from hacking their hardware. They are relying on people's ignorance to justify keeping educated people from using their smarts.

The big issue is that it is all simple math (simple enough to go on a pen+paper Cypto test at my college). And, because Sony failed hardcore to follow the proper steps to insure the process was secure (they didnt use a random number), they are lashing out at the people who poked a whole in their process. FailOverflow showed you a simple process, and Geohot jumped to show you an answer. In a purely academic world they didn't do anything out of place. I'd be like me protecting my game using the formula "y=mx+b" where M and B are known and x is my hidden number, y is the resultant signature, B shoulda been random but wasn't. Geohot comes by and says what X is, after FailOverflow shows you how to find M and that B wasnt random. So Sony comes by and they want to outlaw people knowing about how "y=mx+b" works. Its complete idocracy that relies on the legal system supporting corporate money more than human intelegence.

The situation is made even more idiotic by the fact that people want to run software on computers, but corporations only want you to run their software. A computer is however just a computer. Other than these lockout features, one computing device is as good as another, so why can't I run X sofware on some device I bought? I mean, many FOSS projects compiled just fine on the PS3 linux install. Understandably, hacking isn't the greatest thing. But it isn't like they hacked into someone's bank account on some remote server. They hacked a personal device that. The one I personally bought I would assume was mine. Sony wants it to still be theirs. Maybe they have jurisdiction as long as I'm on PSN, cause I signed their agreement. But if I never go on PSN, why should I have to obey that ruleset?

And this is not something they can fix with a single online system/firmware update? As in, "must have minimum version 3.6 to play in multiplayer mode", and that system has a different root password coded in? Sure enough they must have anticipated that such a thing *could* happen.
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I'm not an expert in the system or security so I'll probably say something wrong/stupid, but it seems to be the case that its not possible. Seems like Sony's tried 2 or 3 times already but it's usually been bypassed within a day or so.

I think essentially the hack just compromises the entire system, so that no matter what checks they try to put in it's easily bypassed. The key is stored in silicon on the system, so any change in the master key would brick all the PS3's manufactured in the past, which obviously is not an option.

Even if they did have some kind of new firmware that was uncrackable, people could just as easily hack up the old firmware to bypass all the checks. For example if you "required" a hypothetical uncrackable firmware version 3.6 to play some game, the game would have to query the system saying: "Hey firmware, are you a required version 3.6?" To which the hacked 3.0 firmware replies: "lol yeah I'm 3.6 *snickers* ", and then the game proceeds happily to unlock itself.

Seems like a bad situation so far

Are you aware that your car, rated at 95 horsepowers is actually capable of 130+ with just a software mod? (a friend brought in a regular car for check up. Was very happy with how well it turned out. They called him back two days later, apologizing they loaded the wrong software and gave him racing version, making his car illegal and his insurance void as per law and had to revert it). Turns out, your budget sedan has software that controls everything, from injection to suspension to whatnot, making a difference between family car and rally-capable monster.

And if I have some private land out in colorado, and want to race around in my car, why can't I mod it? people mod cars all the time. Sony sure wouldn't want that....

Or that there is only one GPU and one CPU set, the ratings of i5, i7, 5750 vs. 5770 are just a restriction based on factory tests, sometimes not even that - but are actually identical?
Or that the phones you buy have identical boards, they just use different firmware.
Or that all cameras within have almost all identical components and that the difference between models inside a series is just software.
Or that there is no difference between store-brand cookies and Brand Name ones? Same factory, same ingredients, same process - just different packaging.
Two words: bottled water.

Cost of manufacturing today is, for all practical purpose, zero. it's no longer worth making different parts or use different ingredients - just build top-of-the-line, then flip a bit.

The price difference comes from brand.
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And how.

And this is not something they can fix with a single online system/firmware update? As in, "must have minimum version 3.6 to play in multiplayer mode", and that system has a different root password coded in? Sure enough they must have anticipated that such a thing *could* happen.
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No, the issue is, given the way the system was hacked it is impossible to tell between legit and hacked software. Provided Sony adds a new layer of security, the best they can do is try fix later software. All the old games are still pirateable. (though software as a product is an outdate model being quickly surpassed by software as a surface.)

The situation is made even more idiotic by the fact that people want to run software on computers, but corporations only want you to run their software. A computer is however just a computer. Other than these lockout features, one computing device is as good as another, so why can't I run X sofware on some device I bought? I mean, many FOSS projects compiled just fine on the PS3 linux install. Understandably, hacking isn't the greatest thing. But it isn't like they hacked into someone's bank account on some remote server. They hacked a personal device that. The one I personally bought I would assume was mine. Sony wants it to still be theirs. Maybe they have jurisdiction as long as I'm on PSN, cause I signed their agreement. But if I never go on PSN, why should I have to obey that ruleset?

I'm pretty sure buy using the PS3 you agree to license terms that come with it, in which case the answer "why shouldn't I do this?" is "because you promised not to, if you don't like it don't buy the PS3".