I remember when this sort of thing was circulating after the Wii launch... devs cutting HD development, moving to Wii etc. Never really happened though - obviously this is different circumstances but these rumours can stem from anything.
There's no doubt that hardware sales have a strong impact on software release though, I'd question the logic in dropping support based off of 8 weeks of sales in just Japan though. Given the PSP's success there I think you can have some faith the Vita will rebound, and when you consider how long it took Sony to turn the PS3 around any knee-jerk reactions seem premature.
Not that worrying a rumour anyway as I think it's western development Sony need to drum up more support for, and they ain't gonna be worrying about Japan's sales. EA, Activision, THQ have the sort of properties that could be big assets to the Vita but thus far non of them seem overly keen to support the thing.
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