No-one claimed that you can buy a new PS3 for the price of a HDD.
Everyone is claiming (rightfully) that you can buy the cheapest PS3, buy a bigger/better/faster HDD, and replace the internal HDD with it.
You can buy the cheaper model PS3 + new HDD, for significantly less than buying sony's 320GB console, and still end up with a bigger & faster HDD inside your PS3.
But hey, thanks for subsidising the cheaper PS3's, I'd like another PS3 for my bedroom TV
No one mentioned external drives at all.
The HDD's inside the PS3's are off-the-shelf sata 2.5" HDD's - which they obviously purchase in bulk at the lowest possible price (my PS3's 40GB HDD was a hitachi).
Replacing the stock 160GB/320GB HDD with a newer technology (faster) higher capacity drive is the simplest thing in the world for a new PS3.
Download the latest PS3 firmware, stick it on a usb drive (in the right folder), replace the HDD (seriously .. it's just 2 small screws), turn the PS3 on, stick the USB drive in as required, the PS3 will automatically walk your through formatting the new HDD .... and then you are ready to go.
For an older PS3, you have to back up all your stuff first to an external drive, then do the above, then restore the stuff from the external drive.
1) Simple. 2) Cheaper. 3) Better.