it was a gimped version of linux to begin with, not sure why anyone cared about it (even though about 90% of the people who complained never even used it)
pc's you find on the curb in the trash will run better versions of linux
getting slightly off topic now~
First time I've ever heard this... and it's a load of bullocks if it is true. Having the PS3 reboot into linux cost them nothing, and if they were paying Yellow Dog for their version of Linux (which was the semi-official version) it was unnecessary since there were SEVERAL COMPLETELY FREE ALTERNATIVES that were made simply on a fan basis (See PSUbuntu for probably the largest example)
As for not being fully featured... to me it sounds like YOU are the one that had never tried it since these were complete and feature rich distros... The only thing lacking was true proper graphics acceleration which limited some gaming and video encoding/decoding apps, but there were already many work arounds for it (people had begun to program drivers to use the SPU for such tasks, though the RSX was intentionally locked out by sony)