This is the true reason that I feel like everybody are dancing around. Let's not lie to ourselves, hacking consoles in PS1, PS2 and DC era was for pirating games. Running unlicensed apps or linux was just a nice side effect of true goal. This days it's far less popular because of size, connectivity and prices of games.
For some people your point will be valid. But there are a lot of people who hacked older consoles because:
+ They wanted to region unlock it (this is particularly true in Europe where there is a big demand for Japanese games that weren't released over here)
+ They wanted to run the console at 60hz rather than 50hz (this is true for the much older consoles and again mostly a thing in Europe because some PAL games would run slower than NTSC games. eg Sonic 1 on the Mega Drive)
+ Linux. This was a big incentive behind the PS3 cracks because of the PS3's interesting Cell Processor design. Later the removal of "Other OS" added to the incentive to jailbreak the PS3
+ Media Centres. The reason I've soft modded my Xboxes was to run XBMC
+ Retro gaming. Plenty of systems have been jailbroken so that their owners could play classic Nintendo / Sega / Atari / Amiga / NeoGeo games from the 80s and 90s. Technically it's still breaking copyright laws but given the age of those games some turn a blind eye because it isn't hurting the developers of new games (I'm not saying I agree with their argument either for or against, just presenting their views)
+ Some systems wouldn't allow you to play homebrew games (3rd party titles that are unlicensed from the console manufacturer but granted copyright licence by the games developer). So they're legal to play but the only way to do that was via hacking the console
+ Some jailbreak simply because they want to exercise their right to hack their own hardware. And this isn't just uber nerds either, I've met a surprising number of people who have done it just because they read an article somewhere and thought it sounded fun.
+ ...and yes, some do it to pirate modern games too. But the risk there is always that your device doesn't support future software updates and thus no longer supports modern games online. So it's a bit daft buying a console if you know you're going to pirate modern games; you're much better off with a PC (this was as true 15 years ago as it is now).
As it happens, I welcome the lack of DRM on the Sega CD because I have a few discs that are scratched and thus don't play properly. So I can keep the original discs and cases around but play CD-R copies. I can imagine needing this option more and more if/when disc rot sets in on my other disc-based retro consoles too.
In that era , for me, it was primarily to get around region encoding.
We didn't officially have PlayStation in our country (India) at the time. The only way to get original games instead of pirated ones was to import, usually when a friend was traveling. But region locking was a curse.
I'm so glad region locking is pretty much dead. I believe the 3DS was the last mainstream region locked console? Which again was ridiculous given its the one people would take when traveling.
The 3DS also happens to have perhaps the most fruitful console homebrew scene in recent memory, having full on all-versions unpatchable exploits that are very simple to perform. I wonder if that's in some part the reason that Nintendo has moved away from region locking, given how absolutely trivial it was to bypass it on the 3DS.
Hacking them was easy if you wanted to pirate, but during that time I don't think its the only reason. The games were huge DSL wasn't around in the PS1 days, PS2 yeah it was, and so was DC, but PS1 was more for region locked games like imported Japanese games. Running PS2 games off the HDD if you bought that was way faster, it was a legitimate reason to want to hack it even if you bought games. The size doesn't matter if you just used a reader and copied the discs, the PS3 was easier to use the onboard bluray to copy so you could it off the HDD, but I used hacks to use other branded controllers on the PS3 like on the USB ports. PS3 was somewhat piracy related but otherOS and homebrew matters more than you think, being able to run emulators on xbone in developer mode was enough to keep it from being hacked since you can run emulators on it, while the PS4 was hacked. The PS5 hardware is very attractive in the GPU shortage, and has very decent hardware for the price too.
That might be the true reason for the average person downloading it and jailbreaking their own system, but the dev side of the ps3 jailbreaking scene only really started in earnest when Sony patched out the OtherOS feature.
You couldn't run PS3 games via OtherOS, but hackers didn't care because running their own code really is all they care about.