You might be on to something here. I don't think it is a flaw of the Vita itself however, it is a change in the demographics of mobile today in the US. In Japan (as has been brought up) Vita is doing okay and sales have been picking up for it there as of late. It is the US where you are right most adults won't be using a Vita but I don't necessarily think out of embarrassment but rather because they own a smart phone which is "good enough" for quick gaming, listening to music or podcasts etc. and they see no reason to bring a secondary or often tertiary device with them. Plus it is relatively expensive in terms of a handheld device as its main focus is games.
I wouldn't play a handheld device (including my phone) on public transportation mostly just to avoid being distracted an unaware of those around me but a long train trip or a plane flight you can bet I'm pulling out my Vita and playing as long as my battery will allow me to.
As for using it at home I beg to differ on your assertion that "...it defeats the purpose," especially with the remote play capabilities as many people have multiple TV watchers/users and having that ability allows you to play while the TV is occupied. Handy when the wife insists on watching Happily Ever After or True Blood or even Dracula.
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