Also, a GCP with backwards GC compatability would mean a hell of a lot more to me, as a consumer, than backwards GBA compatability on a GBA2. Hasn't it already been pointed out that the GBA compatible cartriges have already reached somewhat of a saturation point?
I don't think not having a caddy or cartridge system would be especially prohibitive, as there are plenty of kids 8-10 years old that have Discmen and can handle them just fine. Should it be durable? Sure. But that doesn't mean it has to withstand an intentional stomping. If durability were such an important aspect in the minds of the average consumer, nobody would have bought a PS1.
Moreover, I think GC discs being used in a handheld system would make the original decision not to use DVDs make alot more sense.
Given what the PSP is set to accomplish, I find it hard to see how making a GCP is out of the picture. We've got an article stating that their is already a variant of the same CPU that draws half the power, (and this is likely before any process shrinks), there is ATI which is the best at building mobile graphics parts that there is, there a small optical medium roughly the same size as the UMD, and the GC mainboard is already the smallest seen in a console since the Genesis 3. It seems to me that if any console were ever developed to be turned into a handheld, the GC is it. A GCP doesn't have to be something developed in response to PSP, it could have been something Nintendo has been planning for some time. You could even start a new generation of backwards compatibility, with GC2 using a similar sized, larger capacity disc and being backwards compatible with GC/GCP, and 5 or 6 years down the road developing a GCP2.
Moreover, I think a GCP that hit the market around the same time as PSP has the potential to hand Sony some embarrassment, as even Sony's marketing team would be hard pressed to combat hundreds of games already available on a similar-spec'ed competitor's machine.