Actually, It would download the firmware file onto the system first, then flash the rom. it cant be a live down streaming firmware update, failure has its name written all over that.
Trust me, rest of sony ps3 security is about to be blown wide open. Sony thought that going after the hackers would pause all jailbreaking progress but they were wrong. just like how they thought removing Other OS was a good idea. They just repeated there mistake.. Give it... a week, there is about to be a crap load of stuff coming out the hackers are pissed.
No ones intimidated by Sony's made up bs which never was to begin with. Good luck backing that up in court, Sony you really out did yourselves this time!