If the goal is to beat them by price, then perhaps. But there is a fan base out there that loves the PSP (mostly in Japan). Since DLC has been doing so well on the console front, why not bring it to handhelds. It allows for people to get some good titles without having to shell out $30-40 for a new game that they may beat in less than a week. Just don't start releasing episodic and level add ons. That will probably piss people off.
http://www.industrygamers.com/news/3ds-getting-exclusive-titles--paid-dlc-this-year/
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