both the psp and psvita were over engineered for thier times.

PSP should have been a handheld ps1

PSVIta should have been handhed ps2

obviously mabey with a little extra horsepower

i think a psp3 is a good idea as long as they learn from mistakes, its got to be cheap readily availiable and good software support.

handheld games should be handheld games look at ds and 3ds

Not anymore. 

People want more if you're asking them to pay money for a portable because they can already get "ok" level of gaming for free from their smartphone/tablet. 

You have to give them something way beyond that now, something closer to a home console experience. The DS/3DS model doesn't work as well any more, but Nintendo already recoginized this in making the Switch. 

Sony response to Switch is real. Don`t release a new, just release a portable tablet-like PS4 and it`s all good.