From the title I thought you were going to suggest something else ...

While I didn't think it was that good of an idea when I first heard it, I think that the best strategy for the Playstation Vita would have been for Sony to make a series of Phones, Tablets and a dedicated handheld device that were focused on gaming. If you had the PS-Vita selling, a 7 inch vita-tablet for, and a Vita-Phone all running Android, with analogue sticks and buttions, selling for a reasonable price (under $200 for handheld, under $300 for tablet and phone).

You know how there's always a lot of buzz and rumors around the next iPhone and what features it could have?

The same would happen with the Vita. It would actually increase sales since its esentially re-launching Vita every year. If they timed that with a AAA game then that would be even better.

Compability would be handled with the game being developed for the 1st gen Vita, and up-ported to the newer versions with better resolution, frame rates...etc.