XPE, remember MS are massive, their profits in a year are something like 15 times what Sony get (over 10 billion, as opposed to 0.8 billion).
Microsoft can afford to lose $150 per unit sold, Sony on the other hand are likely to end up having to lose about $300 per unit sold if they sell the PS3 at the same price point as the 360, whilst production costs are that much higher.
Also, it's not just 1x $200 + you are talking of millions of $200+ losses, which if you assume that Sony are just about breaking even on the sales of their PS2 at it's current price could see their profits totally wiped out for a while (Sony have not been doing well as a company, and are scraping a profit as it is).
That $200+ loss per unit is going to require the buyer to get a lot of official accessories, or games to make up for it.
comparing DVD's to blu-ray doesn't work - not unless you compare DVD's as they were in 2000 to blu-ray, and in 2000 DVD players were expensivs and they hadn't taken off like they have today.
I honestly cannot see blu-ray or HD-DVD taking off seriously for at least a couple of years, as at the moment the hardware cost is very high, the production costs for replicating the disks is going to be high.
IIRC both HD-DVD and Blu-Ray will cost more to make than even a duel layer, double sided DVD*, and blu-ray is going to require massive amounts of investment in replication machinery whilst HD-DVD abilities can be added to exising replication machinery.
The reason DVD became so popular so fast is because it showed an immediate massive improvement with existing consumer equipment, both HD-DVD and blu-ray won't show an improvement with normal TV's (still what most people have), and won't show a huge improvement in picture quality with a lot of material such as old TV shows.
*Which has a failure rate in production of something like 10X that of deul layer, or double layer disks.