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I think you need to adjust your wording there a bit. People will now realize they can get most of the good games that are on the Xbox 360 for their PS3 that look and run smoother on the PS3...
Well, first of all, the 360 has many big exclusive titles that you won't even see on the PS3 like Halo3, Mass Effect, Bioshock and so on. Theese games will still draw people to get a 360. And regarding "look and run smoother on PS3" I haven't seen any evidence on that sofar. Those game comparisons I've seen (The Darkness for example) didn't show any huge differences and neither have other comparisons I've read (remember fight night where the 306 looked much better than PS3?).
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... as well as being able play online for free ...
Being able to play online for free isn't really something to brag about when there is no good games to play online on the PS3! It might change in the future, but for now that argument is really nothing.
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...and watch Blu Ray with out an additional purchase.
And how many blue ray movies do you/common people own? I have a friend that said it was cool to have a blue ray player at home and when I asked him if how many movies he had he just laughed (hint: 0). Right now there isn't many blue ray movies at all you can get. I wouldn't pay alot for blue ray when I can hardly use it.
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Did I mention 3 times the harddrive space...
My 360 has 20gb and I have never been out of space and I do download many gamedemos and trailers. Why should I need 80 or more GB of hdd space?!
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... wi-fi and hdmi built in. That sounds like a pretty damn good deal for another $100 to me.
Yes, wifi is good and should have been integrated with the 360 so that's one thing the PS3 is better. You can get HDMI with a 360 Elite and still pay less than a PS3, so that argument isn't viable.