Sony's officially denying it, but there's heavy rumoring that it's true, with "leaked" ads from various retailers giving evidence that it's not just one store's sale or something. I agree, it's early; not even 8 months old yet. But they're not selling anywhere near as fast as the company'd like, I guess. A drop down to $500, plus first-party power-showing games may help.
That's still a heck of a value too. Games, music player, photo editing (you can even hook a printer up to it now), watching video from the HDD, 60 gigs expandeable to whatever you want, card reader that takes everthing (but x D, and I'd have
to have an Olympus, wouldn't I?), built-in Wi-Fi that you can use to stream content from your pc, stream content to a PSP anywhere in the world, or just use for net access, free online gaming, and a Blu-Ray player to boot. It's definitely worth
it, but that doesn't change the fact that it's expensive. And if you're buying it JUST to play games, then it's understandeable that one would view it as far too expensive for a console.