Such a great little handheld. Sony did wrong opting for proprietary memory cards and for not even caring to support it. This is all on Sony.
Sony supported it plenty. I don't see how much more they could've done alone. They released a lot of games for it from old well established franchises as well as completely new IPs, games that didn't compromise much as well as games that were made more with portability in mind. Mainstream stuff as well as more niche releases. Big & small. And they really pushed the indie incentive.
They just couldn't justify continuing that kind of support much past the first 2,5+ years because the games were selling like shit. And it's hard to convince 3rd parties to release anything too significant either when their games sell like shit as well.
It's the handheld market that is to "blame." The audience simply wasn't there & wouldn't have been there no matter what Sony did. If you think proprietary memory cards killed Vita, think again. Memory hasn't always been all that cheap. PSP's standardized memory cards were still expensive at the time of PSP's launch and memory cards in the PS1 & PS2 age were even more expensive, relatively-speaking, unless you bought some third party shit that broke easily or often had other problems, yet PS2 was the most successful one of them all.
Thank you very much for that thought-provoking well argued post, NeoGAF is a better place for your presence in it.
I like optimism. Your suggestion of a simple new version of Vita selling "shitloads" and revitalizing Vita is borderline delusional, however. Maybe it would sell some thousands of units for the first month or two, but then sales would die down in a month or two.
And Sony still keeping Vita alive during its fifth year is not them abandoning it too soon. They've kept it going as long as they could. No new hardware revision or major push for games is going to save it anymore.