From a technical capability standpoint, I'm sure that there's a lot of potential insofar as leveraging the Cell processor and/or GPU to further improve the PS3's BD video playback. The question is would Sony actual go through all that trouble to do so. I'm also guessing it's possible (in theory as far as computational power is concerned) for the PS3 to provide some sort of a software-emulation video scaling solution comparable to what you see in higher-end chipsets i.e. Realta/Reon-VX/Faroudja etc.
Aside from the obvious costs in terms of dedicating people and resources to do the development and testing for something like this (and to what financial benefit on Sony's part?), there's also the issue of "protecting" the higher-priced player market. IR remote functionality and the PS3's non-conventional form-factor aside, who would buy a $500+ player, for example, if the PS3 could delivery a superior image compared to significantly more expensive standalone players?
I think a novel solution might be to release BD-specific software upgrades that have to be purchased that users can 'upgrade' to.