Personally, I think its an interesting idea, but not a viable one. And yes, it would take away from the PC's development, considering Planetside (as I understand it) is essentially a four person team, only really two of which are programmers, and only really one of those (Matt) who really work on the base programming for Terragen. So he must focus on creating updates for Terragen 2, and very likely is beginning the framework for Terragen 3. Certainly he could hire some people to port it over, but it is unlikely to be very profitable. Terragen is a professional product, and probably not likely to attract a lot of people willing to plunk down a couple hundred bucks just to make images to 'share with their friends'. Not to mention, people use their PS3 for gaming, movies, the internet, and would have to not use those features for as long as the render goes through (several hours or days).
Really, the bottom line is, the PS3 is a publishing platform, not a development one. Same reason you wouldn't use an ipad to do Photoshop work. Also, these gaming platforms run on very watered down operating systems to make more resources for the games they run. So the Terragen version would also be quite watered down. We already have that. It's called Terragen Classic. If you really want to tinker with it, you could probably get a PC from five years ago for practically free that will run it just fine.
But, like I said, interesting, yet impractical.