I have to agree. The only advantage the PSP had over the DS was its multimedia capabilities. It could play music, surf the web, watch movies, etc. Which was something the DS and lite couldn't do (the DSi sorta can). But now there's the Iphone that can do all of that and more, and much much better. There were a lot of people back in 2004 and 2005 predicting the PSP was going to win, and at that time with the PSP's better graphics and with Sony being the dominant power (in the console arena), it isn't hard to see why people would think that, but now when we look back in retrospect it is actually very easy to see why things played out the way they did. It turns out having a touch screen is a far more useful feature for portable gaming than an analog nub. It also helped that Nintendo provided new and innovative games that couldn't have been done on any other system.
Miyamoto himself said back then that there's nothing the PSP can do that couldn't be done on any other system, and he is absolutely right. If you own a PS2 then you already have a system that can play virtually all of the games the PSP can (because most PSP games are ports from the PS2). The PS2 costs less, and has a larger library of cheaper games. Why mess with an expensive handheld with a tiny screen, poor battery life, and gimped controls when you can own a PS2 plus a DS for not much more money and get so much more value instead.