So I had dismissed this as an April fools joke. Just downloaded the new update and I can confirm that Sony has removed the option to install another OS to the older PS3's.
Don't really care. It does suck that a feature that people paid money for is being taken away, but honestly...a game console should be just that. A game console.
I've always maintained that the Microsoft was right in not incorporating an internet browser in the 360. The machine is designed to play video games easily and efficiently and is priced as such. Use a PC if you want to browse the internet.