When I saw it I couldn't help thinking of the 0DS mock up
http://img.gawkerassets.com/img/18yhov1wf0ysopng/original.pngI love how Nintendo and Sony are now locked in a race to downgrade their portable hardware as much s possible. I guess after getting rid of the screen and battery the next thing to go will be the controls.
BUT SERIOUSLY: I think it's a actually a brilliant idea for a budget console. It's similar to the android micro consoles but from a house hold name in consumer electronics and with decent controls plus an infinitely better software library (not counting emulators of course).
If you've got PS+ and are stacking up the Vita games in your download library but don't have the actuall console this would be a very cheap way of enjoying a lot of pretty good titles. There is a list somewhere of what games will be compatible (sounds like the lack of micro phone and touch is here to stay). Add that to the PS4 remote play function and I think it's very interesting gadget. Heck there must be a small market for screen capture enthusiasts alone.
I doubt it'll be that successful though. People aren't queuing up to play the Vita as it is and the price of PS3 keeps falling. I know I'd rather have access to the PS3 library then the Vita's. And I don't think there is any evidence of micro consoles doing well outside their kick starter campaigns yet.
It'll certainly be interesting to watch this play out.