The UMD is why the PSP was as successful as it was. Or a contributing factor.
It allowed near PS2 quality games by offering large amounts of storage long before flash cartridge capacity caught up. It made most of the top selling games on PSP (LCS, Battlefront, NFS, etc) possible.
Being optical media, it's cheap and easy to make. This allowed niche companies to do physical releases most cost effectively than on the DS. Sure, MH caused the PSP to dominate in Japan, but look at all those adventure games and low tier RPGs it's gotten - that's possible because of the cheap optical media.
Yes, with poor programming it could be slow. But this was solved years ago when flash media finally caught up to optical media in capacity at a cheap price - you could simply install the game to the memory stick. Again, it was up to the programmers to implement it, but the solution exists.
Going to cartridge means the Vita has no advantage vs the 3DS - no backwards comparability (without rebuying games on PSN and hoping they work) and for niche companies, it's no longer cheaper to produce physical copies than the competitor.