Had they simply downgraded the screen and nothing else, I'd absolutely agree with you.  

Twin sticks and the fact it's so powerful are the main part of the device; and to a lesser extent the front touch and rear touch.  That's been the whole push of the advertising campaign; how it differs itself from 3DS and other handheld devices etc. etc.

Screen has been something people on forums have brought up and, at least for the first 6 months or so, were reminded that it's only a small amount of people on forums who keep going on about the OLED screen and the majority of the public don't care or really know what it is.

Heck, I'd argue battery life is more important in a handheld device.

It is absolutely a cost moves and a like-for-like comparisons of only screen, it is a downgrade.  But as part of an overall package (which is what the machine is - it isn't only a screen and nothing else) then I don't agree.  

Or, at the very least, it'll differ from person to person whether it's an upgrade or a downgrade depending on what their priorities are.

It's a better name to begin with, plus the great reputation the PSP Slim had, better battery, controllers and maneuverability.

If mainstream consumers would care about screen quality the 3DS wouldn't sell. Yes the screen is a downgrade but no one who doesn't have side by side comparison will care. But what they do care about is the lower price, the smaller dimensions and the longer battery life.

Did you get one of the original Vita models? While pure blacks look lovely on it there are times where it gives a strange artifact effect in some games. Point being that @ bold it was a key selling point, the console didn't sell based on that point, now they're just going all out to show off the systems other features and games galore.