I think it was a smart move, because DVD was the next big thing in entertainment, and stand-alone players were fairly expensive when the PS2 came out (so was the PS2 but it was both, kinda). It boosted sales because people thought were getting a bonus, despite the fact it is only a small addition to the hardware that reads DVD-ROMS (which are the media for the games).
Which explains the problems with DVD put into the consoles... But that's another story.
Me, I have no need for another DVD-capable device, since I didn't have many DVDs when the PS2 and XBOX came out, and now I have a DVD drive in my computer and a stand-alone Pioneer player (BLAU!) so it allowed me to save money and buy the GCN instead, which was my choice from the start.
The moral of the story: Integration blows. Believe that, j'player!