We just learned through SteamDeck that it is already possible for a handheld device to house a downgraded RDNA2/Zen2 alongside an NVMe SSD at a fairly decent price and battery life. In other words, PS5's architecture is likely "scalable" as I was speculating/hoping it would be back in early 2018.
I'm pretty sure Sony will release a PS5 portable SKU targeting one-third the resolution of the standard model and lower framerate with the rest of the settings left mostly untouched, barring some exclusives. No, it won't be another Vita situation because it IS a PS5 for all intents and purposes. No one will go through the extra headache and risks of having to develop or rework games for it specifically; it's a complementary SKU that shares the same architecture. So it doesn't need to sell gangbusters to justify its existence financially.
Thanks to the enormous success of the Switch and their own struggle in Japan, Sony is most likely going to do something about it. I'm not implying PS5 Portable would even sell more than 20% of Switch or Switch 2 worldwide. But 20% is a healthy additive to PS5's numbers. Again, it's an optional SKU with a massive library of quality games accessible. Vita wasn't that.
I think one potential hurdle is what Sony intends to do with the "PS5 Pro". If the intention is to further push the fidelity envelope, which might necessitate reducing the typical resolution for exclusives on the standard model down to as low as 1080p, then no amount of simple downscaling would be enough to make the portable version playable. Another challenge may be game sizes and storage system.