Question,
Can this device be a sustainable product at the lower rate of sales we are seeing?
That's the important question here, lets try to steer away from "OMG BOOMBER!!, SYSTEM IZ DEAD!!!"
I say yes, there is no reason you can't have a device existing on the market and sold to a niche audience, there is a market for the system albeit a smaller one, the only issue is whether they can continue to support it in terms of software, now Sony themselves I think will continue to do so regardless, even if that means it becomes a porting device for cross buy, then that leaves third parties, now remember how critical we all was with regards to minis and then recently we heard that people were making money in that space, Velocity being a prime example.
We also have Playstation mobile coming this autumn, that should help bolster the system a little, and like I said before I can guarantee companies like Drinkbox have made money on the PV Vita, and others devs can can to.
The point I'm trying to drive home is does the system need to be cut lose because it's not matching it's competitors?, can it be a sustainable 'niche' product?