PS2 is a powerfull console, the ram isn't a problem for sure (if you played Vagrant Story on PSX you can understand easily), it can generate a very good number poligons (if you saw Metal Gear Solid 2 demo you can understand easily) and it still have square (they said nintendo game boy Ad, not game cube guys) by its side.
Now the easiest part, PS2 sells a lot (that was dreamcast's problem, it didn't sell enough)
so the Software companies make games to it (even if it's reeaaally hard to program) because they will make a lot of meseta !!!
Thats why sega is porting games to it, they have a solid deal. PERIOD
I HOPE TO SEE A VERSION OF PSO FIGHTING SIDE BY SIDE WITH FFXI THAT'S ALL!!!!!!!!!!!!
PS: I love my dreamcast but hearing a notice that it's dead makes me sad. And I'm not a Sony lover (I'm a RPG lover), I'm just facing the truth..... Now I'll go play PSO!!!!!!