It would ne foolish if you people don't think Piracy doesn't hurt sales. The reason people pirate on PSP is that it is so damn easy to do. Yes the DS isn't that hard itself but the casual crowd isn't going to be a tech swavy as hardcore crowd in which Sony themselves say they cater to.
I do think UMD games should be more in the range of DS games though and that is the only other factor than piracy that I see hurting the PSP. If you told me the only way possible to watch movies was buying them then I would have hundreds of DVDs. Since downloading is easy I only buy great movies and download movies I have seen in the past or theater (Sorry I need to eat, live and buy games). Crappy movies are also worth downloading but not buying to me anyways.
One thing I can say is that I have never pirated any game that is out on current or last gen systems. I do download roms for older games to play on my computer but if there is a remake I tend to buy the games I downloaded.