It has everything to do with hardware design. It does nothing groundbreaking new. Yes its got a nice screen, its got good graphics and I`m sure its easy to develop for. But thats not enough! It has to have a "must have" factor and it doesnt.
Sony need to take som risks, playing it safe gets them nowhere, doing the same thing over and over gets them nowhere.
vita (and even the 3ds) are doing poorly because of the rise of the smartphone/tablet business. games are too expensive, the hardware is too expensive and there's no support for the platform.
what's the hardware must have factor of the 3ds that's also making nintendo keep lowering their forecasts? the 3d screen?
that market is changing and sony is (?) learning that. nintendo had to drop their hardware price AND release big names for their platform for the 3ds to rise from its early grave. it had nothing to do with hardware design.
meanwhile, vita is still sitting at the original price point and the sw support is nowhere to be seen in 2013. again, not hardware related.
the vita is a capable and well designed machine, from hw to OS, having played with one already it's certainly the best handheld i've ever used, the OS is nice too (still needs some improvements).
what did the ps1 bring to the table? cd's and 3d graphics. what did ps2 bring? dvd's and better 3d graphics. what did the ps3 bring? blurays and better 3d graphics.
what is the ps4 gonna bring? blurays and better 3d graphics.
the controller has stayed the same, we've been using motion control gimmicks for a long time now, but truly exotic hardware isn't that relevant anymore.
what will make nintendo/sony/microsoft rise or fall are the online services they provide, the franchises they create/get exclusively and the adoption of new trends, like social gaming and F2P.