The PSP, in any form, as been in product and use for too long. My damn phone has more general power than my PSP, which is just sad. Sony is long overdue in creating and producing a new portable gaming system(PSP2, anyone?). Of course, Sony will screw that up and not allow the PSP2 to have backwards comparability(which is what will really sell "next-generation devices) and it will take Sony many years to make the new PSP worth having.
If they are going to make a PSP/Phone, then Sony needs to wait to create a PSP2/Phone. Who is going to waste money on yet another iteration of the PSP? Ten, maybe twenty people? This phone, if made, will just be another spectacular failure.
It will end up being 2065 before the PSP2 comes out, but by that time, Sony will either have been absorbed due to massive financial failure, or Sony will end up being some cheap electronics manufacturer that is only in business to create knockoffs. Oh wait, they already are.