People associate PSP as a failure all the time, it's just amazing. The thing is, it brings in more mony to Sony than the PS3 does. It has sold over 50 million. The only thing that has hurt the PSP is the same thing people bitch about, UMD. People simply don't buy games for it. Most people I know hack the damn thing to play Nintendo games. The Go was needed finaciallly for the company and I am all for it.
Well yes, the PSP actually brings in money for Sony rather than bleeding it. In my opinion the PSP is indeed a success - especially in hardware sales. In software sales it always has struggled, though the situation is improving. The reason why people think failure is because for a while it seemed destined to knock Nintendo from leading the handheld market and then fell far short of that goal, people just haven't looked at how huge that goal is.