Sony hasn't abandoned the PSP. Think of the trailers for Resistance Retribution, or consider the great games on the system: Jeanne D'Arc, Vice City Stories, MGS Portable Ops, or God of War Chains of Olympus.
Sure, you can critique UMD and the quasi-proprietary memory format (though prices have dropped). But Sony did something smart by making the PSP an all-in-one media device, with no storage limitations - plug in your 8GB flash, you can play your entire audio collection. Plug it into your computer, you can access whatever you want (wish I could do that with my DS). Click on the WLAN, you can surf the web. If I had one gripe, it's the lack of touch controls, but PSP2 should take care of that.