It really goes back to profits. Nintendo designed the last couple of systems for a small market, by profiting on hardware sales right away, and generating a huge lineup of first party titles that you score a large percentage on. Sony invested greatly in systems they lost money on, poored lots of money into generating 3rd party interest to get them flowing their content on their system, and with the psp they've attempted to gather support for the umd format. The umd format clearly failed for movies. And I don't know if the rate at which they are selling will gather them huge profits. It's more or less a huge investment for a modest return. For Sony that could be considered a failure, or at least not worth it. Especially when its clear the ps3 could have benefited from the extra attention. It's like saying if Spiderman 3 makes 600 million would that be a failure? not in the sense that it's double what it cost them, but it is in the sense that it's way more expensive then their prior films and more then 200 million less in revenue. So you have to take in to account what their in it for.
Here is the mark of failure for Sony: If the psp and the ps3 combined do not sell as well as the ps2, then in my opinion they have to figure they've taken a large step down in this industry. Your not supposed expand your business, spend more, and have a combined smaller user base.
And just to clarify my position, when we have these conversations I'm a business man, not a gamer, I always look at this like a business. Forget what you want, or like or would love to see, look at it from a business perspective, stock holders have expectations built on past performance, and thats what needs to be considered. Try at the top of your game to invest more money create two products for the industry and have them combined sell worse then your solo last gen offering. that simply won't float.