I agreed with everything in that mini-essay except for this part. Pretty much every system except for the PS3 is seeing it's share of piracy. Even the DS, with its titanic sales numbers, has arguably the easiest piracy method of the current consoles - it's literally drag and drop.
While I don't contest that piracy is an issue with the PSP, I don't think it's the primary issue. If companies refused to make games just because they'll be pirated (which is almost an inevitability in this day and age), then we'd be pretty much limited to MMO games (and even those have private servers).
I don't think the PSP appeals to as broad of a spectrum of people as the DS does. The variety and number of games is fewer for the PSP, and the games that target the "non-gamer" demographic is low compared to the DS.
Also, I tend to see children / young adults with a DS more often than a PSP. These are the people who will generally buy games / have games bought for them. There needs to be more games accessible to that demographic.