Here's the reason, SMARTPHONES.
Those small portable games like Pokemon just aren't worth the $40-$50 price attack anymore. Dedicated handhelds need to become more console-like but at the same time keep their portability and unique experiences not possible on a console or smartphones.(Although in Japan, portables could totally replace home consoles.)
But you can't have console-like experience with only 1 analog stick. Actually you can but it will be inferior to the Vita.
If you ever played a Monster Hunter game or Peace Walker on the PSP you would know how important a second analog is.







