I'd hate to say it but I agree...for a personal reason. I personally think there aren't any interesting games for it. But then again, that is what I think....I am sure there are fun games for it that a lot of people enjoy. My friend loves the Fight Night for it, and GTA....so he thinks it is worth it.
They did the same thing with the Dreamcast because it was getting outsold. Dreamcast freaking rules....I don't know many people who own one and wouldn't say it was a fantastic system. But it lost in the console wars because of graphics...so the media went hard on it to give it a quick death. Looks like the same for the PSP.
Overall i don't think it was a real failure...just a failure to me because I didn't get into what it was offering. Does that make sense?