According to Wiki the UMDs hold 900mb if single layered and 1.8gb if dual layered. I guess it was just easier to go with memory cards for games instead, plus they don't need a drive to spin the discs meaning more room for tech inside the console itself.

Having difficulty trying to find a decent version of my gaming tag to use on psn that isn't already in use. My PS3 isn't used much so no problems with changing that gamertag but you can't even use spaces on PSN.