I actually have used my Vita to watch videos more than anything else I've done with it. It's actually several steps back from the PSP in terms of usage, other than the screen obviously (which while mostly great, tends to oversaturate things, too, so people can sometimes look like they have fake tans).
For instance, on the PSP, you can quickly move through your videos using the shoulder buttons. You could play in slow motion, and adjust the playback in tenths of seconds. About the only real option on the Vita is playing at 1.5 and 1.0 speed. And basic features like Repeat are sort of hidden, you have to tap finger in the bottom right to bring up settings, the pick repeat from a menu if want a video to repeat, while it's just in the main toolbar on the
I can't believe there isn't an official app, I mean, it's not like Sony has their own e-book store or anything