Due to popular demand Joystiq thought it best to clarify further why exactly, they feel Sony's move to drop backwards compatibility from the 40GB PAL model was at best misguided and at worst cruel to its consumer base.
First off, the cost to Sony for including the software emulation is very minimal. Though some people have cited the Emotion Engine and Graphics Synthesizer, both of those pieces of hardware were removed from the PAL design in late February 2007 and cost an estimated $27. Essentially, the software emulation has been running entirely on PS3 hardware for the full extent of its tenure in the PAL region. So that $27 that Sony is presumably saving by not using software backwards compatibility is misinformed.