Sony and co would be insane to ignore the GBA, and do PS & PS2 style games for the PSP. I love my GBA, and the range and quality of the software is still good despite what I said above.
Games like WarioWare and Advance Wars would be laughed at on the current 'big' consoles, but suit the GBA perfectly - they are immediate, no messing and fun.
Thats what will sell. Unless Sony make it clear, and give incentives to the software houses, to produce differents sorts of titles, then their beloved PSP (and their money) will wither away and die.
They make money producing games that people want to play. On a handheld graphical style matters far less, as you can't show off, and on a little screen mad graphic effects loose their impact. We want quick personal gratification (oo-er!) from our handheld games (missus!).
If they go on producing the big blockbuster formulaic crap for the PSP, people wont buy it. They play that sort of game on their PS2 or GC - so what is the point?
They go down that path at their peril.