I think it was a very smart move for Sony to make God of War II for the PS2 rather than for the PS3. The original God of War sold so well because it was on a popular platform (the PS2) and the gameplay was super-fun, yet easy to understand.
Sony could have made God of War II for the PS3 and taken another three years building a new game from the ground up, or they could make it for the PS2, which would take a relatively short amount of time to churn out, furthur build up the franchise's popularity, and sell a lot more copies of the game. Then, by the time God of War III on PS3 is released, there will be many more PS3's out there, and people will be more familiar with the franchis.
Besides, it gives people something to play while they wait for the PS3's price to drop a bit, rather than going out and buying a competitior's product.