I mean if you think about it, both the PSP and the DS were plagued by flashcarts and illegal downloads and that lead to the ever decreasing software sales. And Nintendo's Gameboy lasted 11 years, with revisions along the way. They really like making good profit on some seriously cheap hardware. DS was just that.
But the extreme degree of piracy made people stop developing games for the platform and they couldn't keep software sales up. It's pretty clear that Nintendo had no intention of giving up the on the DS because they pretty much force choked it early for the sake of the 3DS. As for Sony, I think they felt as they couldn't be too late to the party after Nintendo launched.
And because they still wanted a certain degree of power, we saw the most expensive handhelds that Nintendo and Sony ever released (Even after 80$ price drop, 3DS is more costly than the Game Gear at launch. Though inflation and expendable income comparisons makes this a bit off).
I'd dare say that the early software droughts of the 3DS are partly attributed to Nintendo rushing out to the gate.
http://gamrconnect.vgchartz.com/profile/92109/nintendopie/ Nintendopie Was obviously right and I was obviously wrong. I will forever be a lesser being than them. (6/16/13)