I think this is all a smokescreen to help cover for the fact that Geohot released a firmware update that added back features that in no way impact piracy and yet that's the argument they want to make for why he should be stopped.

Laughable, though. It's not going to matter. They can kill everyone who did the hack or bury them in a bunker somewhere, but it's not going to make any difference. The code's floating out there. Everything Sony does with lawyers is just fueling the fire to go out and use that code in the way they don't want (and keep screaming to the world).

If Sony had some imagination, they'd have embraced the new possibilities of the firmware update by enabling on their own homebrew and Linux again (since the reason they took it away was because of security).

Their whole mess with Geohot began when they took away Linux support. If they enabled everything he did on their official firmware or on an "alternative firmware release," then they could get some good will and at the same time reinforce the notion that they remain the best place to get firmwares for your PS3. If they let people go off and get used to getting third party firmwares (because someone wants Linux or homebrew), then that will build up confidence in using third party firmwares and could lead eventually to them trusting "piracy firmwares," too.

Or Sony can sue Geohot and make big stories of the whole affair, advertising their vulnerability and the existence of code that will never be locked down again. It just seems like one option has the benefit of having a chance in hell of being a success and the other seems like stupidity.