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tiffac said:

Discontinuing the Vita after advertising it as a companion device for the PS4 would not be good for Sony. It would not only show that Sony has no faith in their product but in their overall vision and strategy in the gaming market. It would just be a massive PR disaster if they run and quit now. 

Their best option is to lower the Vita's production (I think this has already been done), as it has found its niche audience. If they can advertise the VTV better and help localize those most wanted games stuck in Japan. Then maybe Sony could turn the Vita's fortunes around.

Edit: The PSV cannot relive the PSP success because Sony made a mistake by going with a western centric strategy on a handheld device which is not the core strength of the PSP. The only thing Sony can do is try to make the Vita into the next comeback kid (not necessarily going in par with the PSP sales) but at least within a respectable range when its life cycle ends.

Actually I think you're right that Discontinuing it might be a bad idea. It's just heartbreaking seeing all of these great games like Killzone Merc that obviously have heart in them and budgets comparible to their home console versions, completely flopping in the sales department time and time again.