You are 100% correct but they started clamping down on people using Dev mode strictly for emulators and homebrew. So here we are.
This is what killed Linux support on PS as well, Sony was disappointed with what was being done with PS2Linux, instead of indie titles.
Hence why PS3 Other OS no longer did hardware acceleration.
In their defense, they clamped down following lobbying (and pressure) from Nintendo IIRC.
Part of me also thinks that Microsoft were so forward with offering what was basically a test kit because they were confident in their security.