" Sony could, if Morpheus matches up to the competition, price everyone else out of the market."
Except that the Oculus (the competition you seem to be eluding to) does not work for the consoles, and this device is not for PC. So no, I don't see that happening. Not to mention, did you see the last time Sony released a head mount 3D display? It was a thousand bucks... without all of the extra motion tracking equipment. Sony has never been in the business to be the company that looks to price others out of the market. Everything they sell is priced at a premium simply because of the name Sony, and I don't see that tax going away. Just take a look at their TV division. The example of how friendly they are by selling their PS3's at a lose for their good buddies i.e. the consumer doesn't fly either as ALL the consoles back then, PS1, 2, 3 Dreamcast, N64, Original Xbox, 360.... They all sold the hardware at a loss and eventually turned profit.
Anyways, it's two different market segments.. I'm sure Palmer isn't getting bent out of shape, nor was he attending this "party" that Sony crashed.