It is because of the "order of operations" that is required for the pirates to run pirated games:
Step 1 is for a "hacker" to figure out how to run arbitrary code on the console.
Step 2 is for a "homebrewer" to figure out how to use information from step 1 to make the console run existing/ported applications (or their own application/game).
Step 3 is for a "pirate" to use information from step 2 to make the console play copied games.
The basic idea is that the "pirates" rely on the "hacker" to pirate games. Many people believe that the "hackers" and "homebrewers" were content with the "Other OS" option so they never bothered to try to bypass it which delayed the pirates. Now, with the "Other OS" option gone, the hackers took an alternate and illegal route (as this article implies, using a USB dongle) to run their arbitrary code and now it appears that PS3 has a piracy issue. People can speculate that if Sony kept the "Other OS" option, the "hackers" would never have gone this route and the "pirates" would have nothing to piggy-back on. People like Geohot believe this would happen eventually and the removal of "Other OS" simply catalyzed piracy. Personally, I believe if Sony kept the "Other OS" option, they would have gotten another 3 years before piracy, at which point they would have been looking into their next generation console anyway.