Chris Kohler's Game | Life blog has a great Q&A session with Wedbush Morgan's Michael Pachter. When the analyst was asked about the widening gap between DS and PSP, he had this to say: "I don't think Sony will close the gap, and don't think it is important that they do so. Nintendo has over 20 million loyal GBA owners, and we should expect them to dominate the category that they invented. Sony is late to the handheld game, has tried to approach the market from an older demographic, and is just now trying to beef up more kid-friendly content to appeal to 13-17 year olds. I don't think that the gap matters at all, so long as Sony makes money. I also believe that price elasticity of demand dictates that the lower priced product will sell more units. That's why there are more Fords than Maseratis."
While Sony will most likely never be number one this generation, they've gone a long way in changing the handheld marketplace. As long as people continue to buy the system and continue to buy the games, the platform will remain more than viable.