what is up with ps3? no internal scaler for 1080i?

so I was pretty close to buying a PS3 40gb (i don't want to play ps2/ps1 games) because I wanted a blu ray player and HD gaming device. The wii doesn't count as a HD device since it only does 480p and sometimes graphics are necessary. I've been saving up for about 6months selling odd things and doing surveys and such. Well, I finally have enough saved up and while doing some research I ran into this like little bit of information.

The ps3 will not take any native 720p games and scale it to 1080i resolution. My tv is a 480i/480p/1080i. I can not use 720p. My cable box will take a 720p signal and upconvert it to 1080i. This is the same problem as the original xbox in that any source that was 720p encoded it would downconvert to 480p. say what! A $400/$500 piece of hardware doesn't do internal scaling? if the game was encoded in 720p/1080i then it's not an issue. it's for the couple games like resistance fall of man which does only 720p.

The xbox 360 doesn't have this issue as it has an internal scaler. What also bugs me is that the games are NOT 1080p encoded yet that I know of. ps3 keeps talking about Full HD in 1080p yet most if not all the game are 720p. They then upconvert that to 1080p. so games basically now that state 1080p are probably 720p/1080i which my tv likes and then allows a 1080p set to see the 1080i part. why even push 1080p television sets when you don't even have media that is native to that resolution.