The problem with this "rumor" is the same reason why the Rev is backwards compatible to the Cube instead of just downloading them. It isn't the length of time the download would take, its the storage. No one knows the PS3's storage options yet, but many are saying that a hard drive isn't a given at this point. With no hard drive, you can write this rumor off right there. Maybe they'll just stream them... =P They have no problems with load times as it is anyway..
We should find out a lot more during GDC, as Sony is set to annouce a lot as well. It's starting to look like Nintendo should have shown the controller at the first e3 and held on to the virtual console idea for a little longer...