Sony has long since passed the appropriate time to cut the price and try to improve the situation with Vita. Every week that goes by where the system is under-performing at this magnitude, the reputation of the system as a market failure becomes more and more pronounced.
Iwata's story about the GameCube is very relatable to Sony's with the Vita. Iwata said the company missed a point in the GameCube's early days on the market to cut the price and improve sales momentum, and they failed to do so. The result was that the GameCube suffered not only in poorer than expected sales but also the image of being an unsuccessful system, which led to poor third-party support as well as less retail space.
Sony is doing all the wrong things with the Vita. Not cutting price and continuing to pretend things will improve with rushed console ports is akin to driving a stake through the heart. Vita is done, as far as I can see.
