PS2 HDD was halted due to piracy. If you were active back then, Sjeep made HDLOADER, a software that could make full installations of the PS2 games to be played directly from the HDD (sounds familiar:hehe:) without the need of the actual game disc to prevent lens wear and tear. Then a group of hackers reverse engineered the thing and made it compatible with a lot of hdds regardless of brand and sizes, at the same times improving the games' compatibility. Sony was worried that this thing WILL make gamers rent, install and return back the games without actually purchasing it, a loss of revenue for them. The redesigned the PS2 to be slimmer to prevent this.

But the HDD actually was kicking in Japan. They had the BB Navigator (DL games, songs, videos)

A lot of PS2 suddenly became alive again because of this. and I still remember during that time,garage sales had a lot of WTB PS2 fat only.