Idol Minds (developer of Warrior's Lair) has now transitioned to mobile F2P game development (they made Qube Kingdom for example, which is published by DeNA).
SCE San Diego Studio (was overseeing Warrior's Lair and reportedly going to take over development) is now working on Kill Strain. A competitive top-down action game and I thought it was slightly reminiscent of Warrior's Lair.
Anyway, shame that this was cancelled, this looked decent, and a Diablo-style game on PS Vita could have been pretty fun. Honestly, I can't blame SCEA producers from a business point of view, because this game was going to have a hard time in terms of gaining mainstream appeal I think. I definitely don't think this game was going to be commercially successful as a boxed retail title.
Maybe they could have turned it into an F2P game like Fable Legends, seeing how F2P games and MLB are now SCE San Diego Studio's focus anyway.
Anyway in terms of commercial prospects, it could have been released and be the most amazing masterpiece on PS Vita, and it probably still wouldn't get much attention and lots of people would just proceed to perpetuate that PS Vita has no games, unfortunately.
:l
Edit: and maybe the fact that Diablo III was being ported to consoles at the time, might also have contributed to SCEA producers deciding to cancel this. :l