Use only an Ethernet cable compatible with 10BASE-T, 100BASE-TX or 1000BASE-T networks. Do not use a cord for a standard residential telephone line or cables of types other than those mentioned here. Using the wrong type of cord or cable can cause more electrical current than necessary to flow through the LAN connector, which may lead to heat build-up, fire or malfunction.(emphasis mine)
So if you use phone wire instead of a Cat-5 wire, it can make the PS3 overheat and catch fire? If that's true, then the PS3's network interface is a complete piece of trash. With any other network device, using phone wire will simply not work - you won't be able to move any data, but it won't make the device catch fire!
So, is Sony simply exaggerating reality, or is their network hardware really that badly designed?
Or are they worried that someone will try and solder a power plug onto the end of a phone wire and shunt 120vac into the Ethernet jack? But even then, it should just blow out the PS3's circuits. It still shouldn't catch fire.