I can think of lots of reasons for this.
First, the PS3 is still arguably the best Blu-ray player on the market. Second, this can be a whole media server in your home. Third, with Netflix, Hulu, and Amazon, you've got all the main streaming services supported right out of the box.
12GB is enough for disc games and downloading a few casual games. Want more space? Throw in any 2.5" SATA drive.
A top-line Blu-ray player, video streamer, media center, and gaming console all for $200? Heckuva deal, IMNSHO.