The fact that people are complaining about it so much means it's an awesome name.
Remember the complaining when Nintendo changed "Revolution" (every fanboy's dream name) to "Wii?" It was a shitstorm. iPod got a lot of complaints too at first. It's only in retrospect that they seem to be appropriate or fitting names.
Let's look at the name "Vita" for a second:
1. "Vita" is Latin (which means the name crosses language boundaries). It's not like "Playstation" or "Xbox," which can really only be said by their english names.
2. The name appeals to a wider audience. Let's be honest: Names like Playstation and Xbox are a bit outdated. They were simple and meant to appeal primarily to the younger crowd (which were a quickly growing group for gaming in the 90s and early 00s). Now, they actually sound kind of silly if you think about them.
3. "PSV" is a good acronym. It's similar to PSP, but not as awkward as "PSP2."
4. No one here could think of anything better. You might think you could, but your idea is probably actually worse.
