I'm cool with if one wish to mod their PS3 within reason but when it's sole purpose is to get around security protocols to be used to play boot-leg games and such that when it's not cool. The OS feature was a dumb move not that it was removed but that it was ever included to begin with, that's a feature Sony should have know had the potential of being exploited in the first place. If I was on the lead design team I would have said something like "Hey guys this is a game console so let's stop trying to make it a computer."
And before someone mentions "Homebrew" let's ask ourselves this question how big is the community of Legitimate Homebrewers? I know they are out there because there are exceptions to every rule and I don't want to paint the entire community as pirates, but I believe that those that wish to use devices to get around security measures for illegal purposes are far greater in number than Legitimate Homebrewers.
I don't believe Sony will impose a lifetime ban on those who are doing your run of the mill cheating but if your caught using a jailbrake device which allows one to pretty much wreak havoc to online multiplayer games like MW2 and Black-Ops, then that's when I believe you will get the lifetime ban.