I'd say the biggest problem with The Vita is it's price, along with it's proprietary hardware and overall user experience.
I know the PSP the was pirated back and forth, but it went that far because Sony never supported the system the way it should've done from day one. Sony was late as hell when establishing PSN on the device, and there was little focus on integrating the PSP into the service. The comics reader was a good example of that, it was cool little service but a "too little, too late" type of deal when it all was said and done. People who hacked the PSP managed to get more out of the device well before Sony did with their firmware updates. The hacking community brought youtube to the PSP, downloadable/digital/free/backed-up games, an app store approach before the iPhone, etc. I don't say this as someone who hacked his PSP, but I say this as someone who saw what they were doing and wondered why Sony couldn't do similar things for it.
I'd say Sony targeting a more tech-savvy crowd for the PSP and Vita shows a flaw in choosing it's demographic in the first place, focusing on a crowd of people who want the latest and greatest is a fleeting investment if all that crowd wants is the newest smartphones/tablets/gadgets on the market. It's roughly the same market who actively follows any exploits, cracks, or other circumvention techniques.
Sony only started putting back the focus on the PSP well after it was hacked, and couldn't build up a legal user-base because of a lack of incentives over the illegal alternatives. The truth is the Vita can beat out piracy if...
1. Sony can find creative ways to leverage PSN and it's services. Cross Play, Cross Buy, and PS Plus are great examples (provided third-parties buy into these things).
2. More gaming content showing up on the Vita. It's an obvious one and PSM helps bring wide variety of content if enough devs hops on-board. And yes Sony needs to consistently update PSM for devs to help make it successful.
3. Less focus on the anti-piracy stuff (the content manager, no account switching), more focus on improving the overall experience. Continue to create an experience worth buying into, and keep trying to attract a wider audience who want the Vita in the first place. The anti-piracy measures shouldn't need to get in the way, and the barrier to entry doesn't have to be so high with the Vita and the expensive Vita-only memory cards.
The iOS devices have been jailbreaked like crazy, but the tech-savvy are the only ones who care. The majority of normal users will continue to be invested into the iTunes ecosystem, not really know much about jailbreaking, and wouldn't risk hacking their device for the fear of losing their iTunes account they've sunk money into. If Sony wants to see success, they've got to have that kind business-sense in mind. The success of the Xbox 360 and Apple devices proves that in spades.
If PS3 ran PSM, then sure. Otherwise, creating a niche title for a niche market is asking for poor returns on investment. Unless Sony are offering to fund development, which isn't made clear in that article.
