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WereKitten said:

The idea is not that absurd if handled with care.
With PSPGo we're going to see all the back catalogue of the PSP being converted into digital downloads.

The download can be digitally signed and specific to a single PSP unit. It could very well work that your PS3 could run the PSP game provided that the owner PSP is available and paired via USB or wifi, to provide the authentication and to sync save data.

This way you can play the same game on your couch and with better filtering/upscaling or on the road, but you must own the PSP hardware to play the software on your PS3.

No harm done, more value to both PSP and PS3?

This.

I would still have my PSP. For traveling and such. I don't see how this would hurt PSP, at least not hurt it a lot. Portable is still portable, and if it's done how WereKitten suggests, it could be a decent idea. Play your portable games on the big screen right from the couch.