http://www.neowin.net/news/sony-quietly-kills-off-playstation-home#comments
Sony's Playstation Home was an experiment of sorts, meant to be a free community hub for owners of a Playstation 3 to build a personal space and show it off to other PS3 players. That experiment is now over as Sony has killed off the Playstation Home service.
Many Playstation owners may be more focused on the recent update to the PS4, but an automatic update to the PS3 that went out yesterday has removed Playstation Home from existence. Seen more as an experiment introduced by Phil Harrison back in 2008, PS Home brought forth free and paid content for PS3 owners to use to build personal spaces online.
PS Home was shunned by many, but it generated at least some profit through micro-transactions and helped push Microsoft to build the Xbox Game Room for the Xbox 360, which served as a classic arcade room that also carried both free and paid content to access with your avatar.
As of the publishing of this article, Sony has yet to issue any kind of statement regarding the sudden removal of Playstation Home from the PS3.
The idea at the time was neat, but I don't think the infrastructure or power/performance was there (locally on console and on serer). I honestly don't believe even today's consoles and servers could handle what was the original idea behind this. I think they should look at it again in 10 years.