The form factor would be different if it were a phone, it would have to be. Thus it would be near useless as a long term gaming device. 

Aren't we forgetting something?

Your theory is all well and good until you factor in battery life. Sure, in theory Sony could develop a phone/vita in the form factor you want, and with the power you want (perhaps in a few years). Unfortunately the battery will only provide you about 3hrs of gaming before it - and your PHONE - are dead flat.

I like my phone to at least make it through the day without needing to be plugged in, thank you very much. If my Vita (or ipad) runs flat I don't really care, it's not going to bother me not gaming until I can charge it, but if my phone runs flat it's a major PITA!

I don't agree for the some of the same reasons already mentioned.

Unless Sony makes a phone that is over 50% battery in volume and weight, people can't play graphics intensive games on it for hours on the go and still expect to be able to have power for phone calls network access and all the other things people use their smartphones for.

Two, and is a major one: I'm not tying myself to a two year contract for a Sony phone so I can play the latest PSV games. I'm not paying a second cellular/data plan bill for that, and I'm not switching phones and services just to play games, even if they are better than the ones typically found on iOS.

If I just want to play the games and use the PSN gaming services, I want one that's unfettered to a 2 year subscription service. No contracts.

for the price of the vita, if it had a larger storage and was a phone i would have considered it. i don't like AT&T though since they have crap service

Vita phone with verizon + 50gb storage dedicated games and i would buy it.

easily rectified with a power saving feature where at a certain percent it warns you that if you dont switch to a lower power mode you will only have X hours of phone battery.
and if you can charge with USB then most work/school locations can charge it up a bit.
i see what your saying, battery life is important for every hand held device.
laptops do the same thing to an extent, if you unplug a laptop it will go to a power saver mode, screen dims and processes more slowly,
all the vita has to say is

50% battery at this rate your vita will need recharged in 2 hours. then at like 5% say any more games will result in power failure until recharged.

Easily rectified? I'm sorry, but simply telling me my phone is about to run out of juice doesn't do anything to rectify the problem of my phone being about to run out of juice.

People NEED phones that can last all day without requiring a charge. Remember when phones would last 6 days without needing a charge? Ok sure, they couldn't actually do anything other can call or text - which is why we now have smart phones - but ~18hrs is the absolute minimum your phone should be able to last under normal usage patterns.

If you put Vita like gaming into the phone, it'll be dead in hours. Unless people don't game on it of course, in which case what is the f'n point? As an example, by today's battery standards you could probably get 2 hours of gaming out a "Vita phone" and use 50% of the battery, but then the phone is barely going to last another 9 hours (of normal smartphone use) before it's dead.

Nope - I love the fact my Vita is for gaming and my iPhone is for everything else. When battery tech get's about 5x better, then I'll buy your mythical Vita Phone.

Would it have the same controls? Yes, make it a slide open type of device with all the same dual analog buttons touch etc.

With that change, pretty much everything else would be able to remain as is, including raw power.

My Galaxy Nexus phone (quite a bit smaller than the Vita) has a 1850mAh battery. I can geta  2000mAh battery that adds a few mm's of thickness (basically it removes the contour in the back, making the phones back flat). The Vita's battery is 2200mAh. I don't think my idea would change the battery or its life span at all. There are phones (Razr Maxx) that have batteries that are bigger already.

1) Vita's battery is 2200mAh and there are phones that already have that same battery or larger.

2) If it was a high-end smartphone, like most people already buy anyways, AND offered the same experience as the Vita currently offers for games, you would buy it as your phone. Additionally, if it was priced similar to phones/tablets now, you could probably also have a wifi only model for the same $300 you're paying for PSV now. Only difference is you actually have a cheap alternative with the contracted model, especially when considering that most phones are really cheap or free a few months after launch on contract.

I know the charge capacity of the PSV and that's good for 3-5 hours of gaming. Naturally they'd have to go with a high capacity cell if it was repurposed as a cell phone.

I still wouldn't buy it as my smartphone. I'd get another iPhone or buy an Android phone. Most would do the same and there isn't any reasonable argument to suggest otherwise. 

Lastly, even if the phone was free, I'd still be paying for two years of cellular/data service. The price of the phone is pretty insignificant compared to a 24 month bill unless it's replacing another phone/service plan.

As for replacing iOS or Android, see point 2. People have already worked these OSs into their daily workflow, with apps that give their phones the functionality they want. The PSV OS is not a fertile breeding ground for free or $.99 apps and in all likelihood, it never will be. Development costs are higher, there's no existing environment as with iOS and Android, and frankly, games are about the only key apps the PSV OS is likely to see. 

And even if Sony wanted to carve out a small niche of game centric smartphone users, most would just as soon buy the PSV as is to play the same games as the phone without paying for a cell plan. 

The only advantages anyone is looking at is carrying one phone as opposed to a phone and a PSV.

Maybe you should have added a poll to see who would actually be game for a PSV Phone before stating any reasons why Sony should release on instead of the PSV. 

My guess is that the number who would buy one would be less than the number who would buy a PSV, making the whole argument one of "Here's why Sony should reduce the size of their potential market for PSV games."