They had to take out the minimal amount of PS2 guts that made software emulation even possible two years ago to keep the price in check. For them to have slimmed down the form factor, added those pieces back in, AND kept it cheaper in such a short period of time? Major coup for the hardware dudes but imho not happening.

And I don't think they can pull off 100% software based BC yet. PS2 was pretty complex machine for the time, and with all the quirky shortcuts/hardware tricks they did I have a feeling its at the end of the life cycle if ever we see a full software based emu. The original Xbox was a straight forward PC+video card, and even then Microsoft ran into hella problems because of trying to emulate the nvidia card software wise...something as specialized as the PS2...hrm