Simple answer: Definitely

The PSP ( although no DS) is in a league of its own for what it brings to the table.
They turn a profit.
and they, (sony) really have no competition, since I see the DS as something else entirely.
like a toaster.

so there is really no reason to bring toaster sales into the conversation.

In response to the topic title, yes, it will.

The PSPs biggest concern is getting third party developers back. If they can't do that then there's really no point in even trying to sell the PSP2 as a gaming device.

 These are not accurate, and trust me I have a lot of experiance here.

In order of ease. 

Dreamcast: No modification, just a modified image of the CD.

PS2: No modification: Using the HD adapter and a Disc you could easily buy from a website. 

DS & GBA: No modification. Requires a flashcard and a card reader built for the DS. 

N64: No Modification. Zip drive expansion unit.

Genesis, SNES & NES: No Modification. Floppy drive unit.  

Xbox: Exploitable savegame and put it on a memory card. It made modifications to the harddrive and was very easily recoverable if it went wrong. 

PSP: Firmware flash for which you need an expliotable image. Which if done wrong, will brick your PSP and leave it useless and requiring expensive hardware to fix.

Xbox360: Drive firmware flash. Involves taking 360 apart and attatching drive to pc. Dodgy firmware required. 

Saturn: 2 wires + replace  DVD ribbon.

Playstation: 4 wire mod

Gamecube: 5 wire mod, Easy install, requires a replacement case to take full size DVD, but as you've taken it apart to install the mod...

Wii: 5 Wire mod. 

PS3: as yet you can't

Every single method requires you to go to a website and trust it. Bad firmwares can brick your console, or they can steal your money. Each one aquiring the software or hardware is as dodgy as each other, the only risk beyond that is your own installation. Which I've detailed in increasing difficulty above.

The PSP is by no means the easiest to mod, its about middle ground in my book. If you have good soldering skills, it's almost one of the riskiest.

 and...that is why you fall into that niche group I was referring too and not the mass consumer.

Many of the softmods and swap techniques were developed later in the system's life ...

It has to be making some money.  The price is the same for the Slim as the Phat, and since it has less components, smaller battery, smaller size, etc, and the price is the same, they have to be making money back, at least on the lack of materials it uses.

Yes....