A lot of people a speculating that since the PS3 LV0 encryption key has leaked, that all bets are off and piracy for the PS3 is now a fact and there is nothing Sony can do to resolve. They further claim, even if Sony releases a patch, with the availability of this LV0 encryption key, hackers would just need to decrypt the update and snatch from it the new LV0 keys if those are updated using a patch.
This reminds me of a story about a Satellite Broadcaster a few years ago that has lost similar encryption keys that were part of its update mechanism for enabling/disabling your subscription card. Once you had this encryption key you could enable your card without needing to pay anything to the broadcaster.
When this news got out, it seemed to be an obvious bet that the company would go bankrupt in a few months as piracy would ruin them.
But the broadcaster didn’t lose hope and devised a plan that was quite ingenuous. They knew that updating the encryption key in one “bang” would be blunt and very easy to track down. So instead, over the course of a year they sent “junk” data as part of their updates, gradually sending out more and more chunks of indecipherable data. Then one day, they “executed” this “junk” data, and voila! the “junk” wasn’t junk at all. It was self decrypting pieces of code.
There were two very clever parts to their plan. First, they data they sent just hid there until it got executed. In fact, only in retrospect it was noticed that there was even “junk” data there. The second part was that it was not executable on anywhere but on their specific platform. You couldn’t decrypt that data as it used inherit functionality of the hardware on which it ran – you couldn’t easily disassemble it without knowing some of the secret ASM code that ran on their hardware.
The moral of this story is, even when all is lost, as long as your true customers are updating, and your thieves need to upgrade too in order to enjoy the full benefits of the system, you can always regain control over you hardware – in essence having “code execution” on your system allows you full control over it, even if someone else is watching and tracking what you are doing – it is just a tad harder to do so in a way that will mask from guy who controls the system what you are doing.