It's dumb and not because it sounds dumb (though the haters are still primarily kneejerkers and probably didn't actually think it through). Basically, "vita" gives certain images primarily: vitality, energy and health. That's what's dumb about this. If Wii had been called vita there wouldn't be a problem because it would fit the image of active energetic play-styles and health (Wii-fit, Vitality sensor etc). NGP doesn't do that. It's identity seems more like it's just a powerful console-like handheld. Maybe they might make a case if that is indeed the name at E3 but unless this thing has a shake-weight and pedometer attached to it I really have no idea what they would be going for.
Also, no way NGP would never have ever worked as anything other than a code-name. It would date itself as soon as it's released and acronyms without meaning only work if it's already well-established and never referred to in full (YMCA, IGN etc.)