I never really understood why the put the hardware in for BC. In quantities they (hoped to) sell the PS3 it goes into hundreds of millions extra cost, they could hire an army of coders for that money and with full documentation of emulated and emulating machine it should be possible to do some excellent software emulation.
And I do not understand why they dont release recompiled versions of some PS2 classics on PSN which take full advantage of the higher resolution. Even hiring a bunch of texture artists to do highres versions of all textures wouldnt be that expensive. Imagine $10 or $20 (enhanced) versions of R&C 1-3 to accompany the release of R&C ToD, I am sure they would sell very well.