The thing is, as SM64DS shows, the interface simply doesn't match up that well: N64 games aren't as fun with the DS touch screen (although SM64DS isn't as bad as a lot of people say, either). It's also not that great of a business strategy since N64 was not Nintendo's most popular system.
I did expect more 64 ports than we've had, but I can't say I'm sad...really, most people cite the abundance of ports as one of PSP's big "problems".