Not to be purposely argumentative, but I actually think it's best if the cheapest players stay at a $300 minimum for a while. Right now they're flying off the shelves at pretty much any price, so clearly there's no shortage of consumer demand (i.e., no worry of high prices alienating buyers).
Look at what no-holds-barred price-slashing did for HD-DVD: nothing. Partially it's because Toshiba was too little, too late, and too many people were on Blu-Ray's side to make a difference. But the other part is that people really do value things that are more expensive. They get more excited about buying them, they learn more about them before and after buying, and in Blu-Ray's case they're more likely to invest in the software.
Sure, you can argue that if a player costs $200 instead of $300, then that's 4-5 more discs the person can buy with the remaining money. But it also increases the likelihood that the player will sit on the shelf collecting dust or only get used for upconverting DVDs, whereas a player that costs more is more likely to inspire its buyer to invest in a library of titles so it doesn't go to waste.
And while we're on the subject of titles, let's remember that there still ain't that many out there. I, along with most others who read this forum, got into Blu-Ray as a (relatively) early adopter, knowing full well that the availability of movies was severely limited. But once you kick the players down to average-consumer-friendly prices, those average consumers are going to assume that all their favorite movies are ready to be bought on Blu-Ray. So if there isn't a significant -- and I mean HUGE -- spate of BD releases around the holiday season to go along with the player price cut, then the consumer backlash that results could really harm the future of the format. Right now, Blu-Ray releases are still coming in at a trickle. I own pretty much all the Blu-Ray discs that I think are worth having at the moment, and that number is less than ten. Believe me, I'm very much looking forward to seeing a change in this landscape, but it seems hard to believe that it could happen completely in the next several months.