1) It can be an attempt at a cloud based system.
2) The 16gb will be cheaper and more for people who have large hdds for their ps3 (what is the point on spending $300 on a ps3 with 250gb when you can get one for $200 and swap an already existing hdd into it?)
3) It is one of the biggest troll we've seen from Sony.
16 GB HDD is simply nonsense - you can't even get drice of such small capacity anyway and even if you would they'll cost much more than common drives with capacities in range of hundreds GBs. So it's eihter a "typo" and should be really 160 GB or it will be a SSD drive / flash storage instead.
Cheaper version of the PS3 from the looks of it. I'm estimating $200. There was a 20gb model among the launch phat consoles. It's no surprise this will be cheaper and focused more on security update perhaps.