No handheld should cost more than 200 US. I don't care how powerful it is. I really don't see why Sony spent all this time and money on making a revision to the PSP.
Spend more time with developers and trying to reduce piracy first.
They are taking steps in that direction though. One of the other things they said at the launch was that they're cutting development costs quite heavily, and that they're focusing on smaller, more economical titles for the Go!. That should mean more games, and cheaper games to boot.
http://www.joystiq.com/2009/06/02/sony-slashing-psp-development-costs-by-80/The other thing is that they're moving to digital download as the lead platform. That makes sense, and imo, there's enough potential for PSP/PSN to legitimize and expand the download-games market, the same way ipod/itunes legitimized and expanded the downloaded-music market. The piracy element starts to go away when the costs comes down and the convenience goes up for the legit product.