PS4 Getting PS1&PS2 Compatibility?

Came across this info that is reportedly from a very reliable source, but I haven't heard more since the article went up in March. But if this is real and the update comes by or before E3, I may go get a PS4 earlier than I originally planned! I've got some PS2 games my boys like to play, and the old PS2 is having more and more trouble loading up content.

http://www.escapistmagazine.com/news/view/133240-Sony-May-Add-Backward-Compatibility-to-the-PS4

What I think he is talking about is PlayStation Now, which is kind of like Netflix for games. For a subscription price you can play unlimited games from their available library. I think it sounds like a cool idea, but I don't know if you will be able to plug your PS1/2 games into your PS4 and play them that way. 
I miss backwards compatibility... 

The fact that he says "local support" makes me think he means discs. that's how several video game sites seem to interpret this as well, even in light of PS Now. The speculation is that PS Now will be the solution for PS3 games primarily, and software compatibility will be the solution for PS1 and 2 games.

We'll see!