NO

I want the Vita to die and burn in a firey inferno. Maybe then Sony will learn from their mistakes.

No, really.

There are a couple other problems, like the Vita not being a particularly "pocketable" portable--both the 3DS and the PSP can just slide into a pocket--but basically the issue is the memory card.

The cause and effect is *not* complicated. Use market memory, people will buy the largest memory cards they can find, and then will have lose purse-strings when it comes to your digital marketplace. Charge 4X the market price? People will buy the smallest memory card they can fit themselves into and buy nothing online because they can't fit it on their memory cards.

This is the story of why the PSP Go folded in a nutshell: it was a tiny percentage of the PSP market and PSP owners didn't have the memory to shop online, even when given the choice. Even with a PSP model dedicated to digital distribution, other PSP models simply couldn't follow suit. Online sales sputtered and Sony never had any reason to offer titles other than the major blockbusters online. Without titles online there was no reason to buy a PSP Go. It became a negative snowball.

Contrast this with the 3DS. Standard SD card slot, 2 or 4 GB included. Nintendo is making a killing with their online market.

I just want it to do well like the PSP did.

Not better but I want it to be great for all the people that have or want one. Because it would suck for people if the new handheld they have just stopped getting new games.

The Vita and 3DS appeal to a vastly different market then each other while sharing the same goal,gaming anywhere you want to. The 3DS knows its role and plays it to the point while the Vita is confused and trying to market itself to the TV console crowd which in turn has blew up in its face.
The Vita just really needs some games and lots of them because it does not have that killer app like the 3DS does with Mario and Pokemon to drive its sales through the roof so it needs alot of games to make up for this weakness.

I hope both handhelds do well because they both offer me something different then the other and i wont be burnt out as quickly.

I don't think it, at least currently, deserves to beat the 3DS. That said Its very much in out interest as gamers for the Vita to at least sell fairly well. Competition is important after all.

i want them both to do well, otherwise there is no competition and Nintendo will probably not bother upgrading their handhelds as much.

No.
The Vita winning over the 3DS would mean more console-level resources would be diverted away from actual console development.

We can get Console quality HD games only in Vita which is not possible with 3DS so i want Vita do well, so i can have HD graphics on the go.

I want the Vita to do well but if it isn't going to be supported properly it deserves to fail.