I guess maybe it's the fact that PS1 and PSP is architecturally so close? They both have MIPS CPU (IIRC) and the rasterizer in PS1 is very simple compared to PSP's. It would be like running older PC game on a new one maybe?
If that's the case with PS1 and PSP, then in the PC you have 3MB RAM system emulated in software at around 40+MB (thanks whoever that was) on a totally different architecture, so instructions for one hardware is reinterpreted for another type (from MIPS to X86). That's like more than 13x increase in RAM. Can that be used to gauge what's needed from PS2 to PS3? I don't have a clue.
All I know is that 360's pure software BC is far from good, and if it's success actually depended on the BC performance, 360 would be in last place right now. :lol