I bought a PSP last year for mostly homebrew and catching up on those Capcom titles and Dreamcast ports I missed out on all these years.
The DS is fine but I found myself bored with the libary in the end.
I'm more of the hardcore arcade gamer type and the DS has mostly Puzzle, RPGs, and a crap load of casual crap games that can barely be called a game let alone software.
The PSP has plenty of that too, but has more shooters and fighters that I tend to enjoy alot more.
Plus the emulation is downright great for a portable machine.
Also nice web based homebrew and Custom Firmware gives plugin support which opens alot of cool things. Ingame music controls, Standard definition fixs, cheats, and even an ingame RTclock in the corner. (I like to play and see the time)
So as a homebrew powerhouse that you can easily find parts floating about to fix it with, its a pretty great choice.
As a commercial product alone though its rather lacking.
I can't say theres many games I like for the system. I find most playstation games bland but thankfully not casual crap bad.
Just kinda uninspired feeling alot of times.
Though I've found some personal gems I wouldn't have known I liked till I played them.
Also the Capcom games are good for it.
Overall ya, the PSP is kinda dead commercialy but its still a good homebrew machine.
Heck I use it to watch Youtube and junk alot of times.
Personally I wouldn't throw away a PSP until ya try out all the homebrew and find a use for it.
Heck at the least you could make it into an extra screen for your comp to display contact status for an IM or CPU heat and other junk like that with PSPdisp.
Its a real portable homebrew powerhouse.
Gaming libary is decent and has plenty of gems and generally look rather nice for a portable.
So ya, not all that dead homebrew wise but slowing down commercialy yes.
A great buy for the homebrew alone, no need to pirate PSP games, homebrew has ya covered
Maybe buy a few hard to find/get games perhaps, theres a good gem now and then.