In my personal experience -- games.
In the last couple of months, 9 people I know sold their Vita. (some I know personally, some over the forums). When I asked them for a reason, all 9 blamed lack of games.
Most of them were also recent purchasers, taking advantage of €169 bundles with either Killzone or Tearaway. They all said, that after those two games, Uncharted, Gravity Rush and a few more, they have no use for it, no games either released or announced. They all said they were sorry to have bought it. But they all had only praise for the console itself and all its features. Only games were the problem.

In Croatia, used Vita with a 8 GB memory card can be found for under €100, people are selling it much more than buying.

It seems that Vita in the west is a niche console, geared towards fans of Japanese games, and the sales reflect that.

It's games people who buy a psp buy it because they was able to play most popular ps2 games on handheld Vita lack those games

Extra Credit actually did a video on this very subject. ^^

http://www.youtube.com/watch?v=REaUzHef9h4

3 Words. Proprietary Memory Cards.

It should have been a phone.
One of the primary motivations for the vita was 3g, but you had to get a crazy priced at&t plan to use it. 3g was soon discarded.

If it had been a phone, the plan wouldn't have been so unreasonable, would have great online, and people would take it everywhere. Making it singularly a gaming system was the big mistake, especially when mobile is the thing disrupting the handheld industry.

It was the single most important mistake in the whole design.

Next time Sony, don't fuck it up.

There is only one good answer to this question: lack of must have games.

There are many reasons why the Vita never become successful, but the lack of system seller is the main reason!

No 18+ year old male is going to be caught dead playing a game handheld in public, particularly anywhere women might be present.

Playing games on the smartphone is more inconspicuous and gets the job done as far as burning 10-15 minutes of down time.

If the older/dudebros crowd wants to play a "serious" game that's what their home console and 50 inch TV is for at home, there's no interest to play big games on the road. The average older teenager/adult doesn't even have time to do that.

The overall entertainment factor of a smartphone -- with internet browsing, checking Facebook/Twitter/Instagram, text messaging with friends, listening to music, watching videos, and yes maybe playing the odd game of Candy Crush destroys the value proposition of a Vita to any adult which basically just plays games/videos.

Why carry a bulky separate device just to play games on, when the games are in some weird limbo where they're better than smartphone games sure, but they also cost 30x more but aren't as good as home console games.

People don't want "deep" games on the road anywhere IMO. Simple to play smartphone games that can entertain a person for 15 minute bursts is all you need. The traditional handheld is overkill, it's like a fast food restaurant having a $30 steak dinner on the menu with a starter ... no one wants that, they want a hamburger and fries ready to eat in 1-4 minutes for $6. 

It didn't catch on because the experience the Vita was marketed to offer appeals to an extremely niche audience.

If Vita had a noteworthy selection of games people would buy it. Any of the arguments about media or there being no audience or proper usage scenario or marketing apply to the 3DS as well. The 3DS managed to sell fine(not great)because it has a noteworthy selection of games.