"Why haven't they came out with a 3.5" form factor drive in masse? It would seen that it would be the most cost effective for price /performance, unless its just cheaper to mass produce the 2.5's?"
Flash chips are very compact. If they made 3.5" drives, the inside of it would be mostly empty space.
They make 2.5" drives because they can be used in both desktops and laptops, and SSDs are very popular for laptops because they use so little power. There's no real reason to make both, since you can always use an adapter bracket to put a 2.5" drive in a 3.5" desktop bay.
It'll be interesting to see the pricing and performance numbers on these. Probably slower than MLC... but it'll still blow the doors off any mechanical hard disk, especially at heavy random seek tasks like accessing multiple files or applications at once.