First off, you must be doing something wrong, they should all fit on a 2GB stick. Second, why do you need them all on at once? Do you honestly think you'll get to the second disk in a hurry, let alone the third? This game is a 90+ hour game. One at a time man, plus you can put more games on at once.
If you really want all three on at once, download AutoPopstation4 from dl.qj.net.
By the way, does disk 1 and 2 work on the PSP now? Also my disk 1 for FF7 is 529 MB......so yeah, if I wanted them all on, I could easily do it. Try AutoPopstation4, it should help you compress them even more.
Last thing, when you get the option to compress the iso from AutoPopstation4, choose 9.