An upscaler would actually make sense, if it is fast, as those in many in 4K TVs are not, causing input lag on 1080p sources. Then add native Blu-ray 4K support and of course for apps like netflix, put it in a slightly smaller casing - hopefully keep it cool and quiet in the process - and you have a nice PS4 revision. It could even contain the VR breakout box functionality with a second HDMI just to reduce cable chaos.
This is what would actually help the PS4, unlike most of the speculated things in this thread, which would plain kill off PlayStation. And it would explain the rumors. Everything will be fine.