This sucks...who cares if there are diffrent classes for SD cards!!! This will boost the cost in owning the PSV from anywhere between $280 (console plus 4GB card) to a whopping $380 (32GB)!!! It is really an unecessary step for Sony, esp since the 3DS showed that ppl aren't willing to spend $200 on a dedicated VG hardware.

Sony learned along time ago if they blame it on pirates they can get away with anything

But Sony could have repackaged standard cheap memory so it couldn't be used in SD readers. All they had to do was make it a different shape and pin out. They didn't have to use expensive overpriced memory to do that.

There will be two outcomes with this. There'll be enough early adopters for the Vita, and Sony will drop the price of the cars in 2 years. Or they'll tank in sales the first six months and be forced to lower the price earlier than they planned (See Nintendo and the 3DS).

I'm seeing a drastic price reduction within 2012.

I'm fine with there reasons but it doesn't explain those crazy prices.

I am now hoping for the second (If that means the company learns the lesson the hard way, so be it). I was considering if I should pick up the device or not on launch originally, but when this information came out (awhile ago) that I had to have Proprietary Vita Memory cards, I decided to wait. 

Still doesn't excuse the damn price...The format is still inconvenient as you can't transfer data between a PC and the Vita using the card without a converter (I'm sure there are transfer cables for that purpose?) but it's the price that is the main fail part.
Looking at the market for portable consoles or portable gaming in general Sony would want to encourage gamers to download games and extra content but they are not doing that by screwing people over with overpriced cards...

Seriously, Nintendo (hopefully they have learned their lesson) and Sony seems to be doing everything to make matters worse for them, and with the huge threat from mobile gaming they just can't afford to make many mistakes.

I'm no expert but I'm having a feeling that vita is gonna go down the same path as the psp.
With so much portable competition going on these days with tablets/cellphones/ipods able to play games but also be CHEAPER than the psp vita. I don't see how it will succeed.
Sure hardcore gamers will buy it but I highly doubt they can save the psp vita unless their software line-up is really unique.
Still looks like a console portable device as in software that are console ports.

Expensive memory worked for Sony with the PS2 and worked for MS with the 360, expensive memory has never been a problem for the success of a console as long as it have games it will sell.