This is rumor control, here are the facts.
♥ This is not an exploit - it's a clone of the JIG Tool used by Sony to enter machines into service mode for repairs and the like. The term and methodology may be familiar to those of you whom have used "Pandora" batteries for the venerable PSP.
♥ This is not a USB Memory Key. Nobody is going to "upload the files" so you can have it for free. It's a complex device with its own FPGA. Will it be cloned? Probably. Will it be cheaper? Probably. Will it be free for you to torrent? No.
♥ This can not be software patched - ever. The methodology of the device is that it sends the required handshake to the SYSCON which then allows the PS3 to enter a Package Management mode. This is very similar to a service or debug mode insomuch as the unit relaxes security policies while in this mode. This could, for example, allow for a custom firmware package to potentially be installed, thus circumventing the requirement to use the device at each and every boot time. The SYSCON is not writeable by the console and as such no software patch can fix this; only a hardware revision ala the PSP 3000.
The bottom line is this, however - this device does work. It does everything as advertised.