Reason for firmware upgrade releases
Here is why I belive that sony makes the upgades in no particular order of importance.
1)The first reason is obvious to most people. If Sony can upgrade their product then that means that they can add features that will make their psp more attractive to consumers. eg web browser
2) They can also add features that will make it easier for developers to make games. this amounts to better games and, more profit because more people will buy them.
3) The firmware upgrades may help to against piracy via umd loader. I seriously doupt any corporation will choose to do nothing to prevent losing money if they can do something.If you drop a dollar on the ground you are not going to leave it there because you have 100 more in your pocket.I am also sure that the developers aren't happy about iso loaders and have voiced their complaints to sony.I know I wouldn't develop for a system whose company does absolutely nothing about piracy.
4)The firmware upgrades may help to against piracy of other handhelds like GBA. Although The GBA emulator we have now in not up to par, Nintendo sees this as a threat and I am positve that they weren't quiet about it. All morals aside why would the average consumer by a GBA when they can buy a psp that can play free GBA games on a larger screen and, do much more.Also why buy a GBA with ported games when I can play the original SNES games on a larger screen for free on psp.The consumer would see that in the long run that is is more cost affective to buy a psp than a GBA.