SSL bypassing and MITMing is not illegal.
Yes, it is. SSL was designed for making end-to-end connections secure, and that means no MITM because once the connection has been stablished with the certificates, the data is encrypted.
Remember, PSN is not only about online gaming but also about payment methods, invoices, purchased content, licences, private messages, personal data, among many other sensitive information.
So, again, bypassing a security layer placed by a service provider (like Sony) to avoid MITM and other type of attacks IS ILLEGAL.
Otherwise tools like mitmproxy would not exist.
Killing people is illegal, yet tools like knifes and guns exist. Best not to place those sort of examples in order to justify your argument.
Other consoles like the Wii/Wii U have plugins dedicated to the disabling of SSL verification, even when their online services were active.
That doesn't make those plugins legal at all. Another bad argument: "because other people do illegal stuff, then it's OK to do it".
And PSN has other security protocols than SSL.
Yes, there are, but SSL is the first step in the authentication process for a reason.
And the TLS ciphers on the PS3 are already weak.
We are not talking about PS3 but PSN, which is still used by more modern devices. Yet another bad argument to support your claim: "the gate is half open, so that grants me permission to enter the garden because I'm not forcing it".
The worst this could lead to is _my_ account being banned for violating the PSN ToS
If you bypass SSL by your own, in your private environment, then you are the sole responsible.
Discussing how to bypass SSL in a public forum like this over an active service used by millions of people, that involves other people, hence you are not the sole responsible.
which everyone who installs CFW is doing because if I remember correctly that's against ToS.
That's not true. Installing CFW and then using Sony's online services IS against ToS. Installing CFW in your device for private use is not (as long as there is no online use of any online services), because it's impossible for Sony (or anyone for that matter) to know with 100% certainty which console is hacked or not (and Sony won't make a legal move if the costs are not justified).