It was the cheapest BD player at launch, but remember, at launch HDTVs were still on the rise at the time and allot of us were still using SDTVs so we didn’t care for BD, even then I don’t know how many with HDTVs cared for BD.
The price of the systems was a talking point, the only people I knew of to say the PS3 was a good price were those looking at it as a BD player more so than just a console.
For context (360 basic £210, 360 w/HDD £280, Wii £180, Ps3 £425).
Had MS included a HD DVD player and raised the price of the console, I think the 360 would have suffered to the PS3’s benefit.