updated 12:25 pm EDT, Fri August 27, 2010
PS Jailbreak already shut down by Sony
Sony today took quick action to shut down PS3 modders with legal action against PS Jailbreak. The console maker was granted a temporary ban on PS Jailbreak in Australia that will prevent the USB mod, which 'unlocks' the PS3 to allow unapproved software, from being sold in the country until a final decision from courts on whether it remains legal. The terms discovered by PS3Hax also give Sony control over current inventory and will likely see it reverse engineer the hack to patch against it as well as destroy the stock.
Whether or not Sony's actions are legal isn't known. Mod chips are legal in Australia as only the distribution of content, not the devices to facilitate using it, is against the law. However, PS Jailbreak also allows copying games against developers' wishes and could raise legal questions on its own.
Its existence had been considered 'necessary' by some after the PS3 3.21 update prevented installing Linux or other operating systems. Sony publicly said it was due to security, but most believe it was to prevent the hacks that it couldn't stop in an outside OS.
The hack puts a quick if not necessarily permanent end in part of the world to PS Jailbreak, whose sales had only started in earnest last week. It sells to other countries, including Canada, the US and parts of Europe, but it's unclear if sales will continue in these areas.