It does update, but that's not the point. If all you want is a Blu-Ray player, than the PS3 is inadequate. Newer ones have surpassed it. This is a normal thing that always happens with this kind of tech.
However, I'm not saying that it's a bad thing to get overall. If you want to blow off a ton of money on the console, go ahead, but in my opinion it just isn't worth the money at the moment.