Actually people wanted a cheaper console at the time when they realized the 20GB wasn't actually shipping post launch supply in 2006. All of a sudden they have the choice of the 60GB $599 model the 60GB $599 model or... the 60GB $599 model. For those that were happy to rate down, it was overly apparent in the supply stream that the 20GB was canned and the $599 60GB model was the primary. For those late to the game the 60GB was $599 magically enough.

So the 40 didn't solve the problem of filling the void that the 20GB model left for consumers in North America, people still wanted to play their old titles, they wanted to be able to see FMV on newly purchased PS2 titles, they didn't want glitchy partial support through software though or none at all as featured in the 80GB model (the 40 has 0 bc support) so the 80 was never a solution, it was a way to cut costs at the corporate level because they didn't want to continue the 20GB and 60GB lines.

The 80GB is already out here, people didn't rush for it though, they went for the 60 because it was the one with full features, just like when the 40 hit it was a success but it would be interesting to see how many of those owners knew about the lack of support to their existing library. It's odd that you act like because a new console came out that all prior titles are null and void, hardly the case, unless you're saying those who just barely bought a PS2 and God of War 1 & 2 should suck it up because no one really misses that feature especially after the company had pushed how the PS3 wouldn't chop out the BC functionality.

The whole statement is flawed, people didn't demand a cheaper console, they just wanted their options that were taken away back. 20GB =/= 40GB no matter how you try to gloss it up, the 40 is a failed attempt to feed the value market in terms of features.