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To keep it simple,
1) PSP is easier to hack than the NDS
2) PSP hack costs you almost nothing since it is a firmware hack, for NDS Homebrew Booting accessories cost from 45-60$/Euros.
3) Most PSP games have been ports of PS2 games with a few features tacked in such as AD-Hoc multiplayer etc .. Gamers are not going to shell out 30-40$ for the same game they own on the PS2.
4) Just like the Ps2 initially, more people are using the PSP as a media player (mp3,mp4) rather than a gaming handheld console.



Heeeeyyyy!!!! <Snap>