How does one go to jail for this?  Has this somehow been declared a criminal case?

I'd like to see the source as well.

Personally am all for this guy - he does nothing to hurt the gamer and doesn't deserve anywhere near the hate he's getting from some misinformed individuals.
Then again, Sony's corporate greed is typical of a company like Sony.  Already shown they don't give a flying f*ck about customer security in the recent hackings (thanks to the group who made everyone aware of that) and possibly also how bullchocolate the PCI certification that Sony would've had to be compliant with, is.