I will say if Blu-ray players drop to $150, that is a great start at becoming mass market. Not only do they have to work on the prices of the players, but they NEED to lower movie prices as well.
Now, concerning the PS3's price, if it was $299, I think that is a fair price for it, also considering the rumors that it will drop to that by April.
@ivid In dealing with firmware updates, I understand your concern with having to do one to watch newer movies. I consider there are two categories of firmware updates.
One is the updates you refer to, which are for the AACS copy-protection, which is required on ALL Blu-ray players.
The other category is for the PS3. The PS3 not only does the same firmware updates as the other category, but also does firmware updates to add new features. A while back, it added support for the latest DTS Surround Sound (Can't remember the exact official name). This is party why the PS3 is the Best Blu-ray player around. The main reason being price value, but if stand-alones drop to $99, then the price value is dimished.