The PSP Go was a flop for a few reasons.
The hardware itself is considered by many to be one of the best iterations of the platform. It was small enough to be genuinely portable, the screen was excellent, and you could connect it to the TV and a PS3 controller so you could play in a hotel fairly easily.
The problem came from the following factors
1) it was hideously over priced at £225 when the PSP 3000 was about £150 probably including a game
2) it was digital only, so anyone with a PSP was never going to buy one as they couldn't play their old games.
3) Because it was digital only, retailers couldn't make any money selling games, so they didn't support it
4) Because it was selling software from the PSP library on the PSN, the contrcts originally drawn up for the games didn;t include much of a digital market. So the games were all still way over priced compared to what you could get the game for on Amazon.
I have one, and I liked it.
The reasons I think the PS Vita soled those problems are
1) While the launch price of the Vita was I think £199 for the WiFi version, bundles appeared on day one to get you free games and memory cards for not much more. Not bad for something that had technology in it to rival high end smart phones
2) It takes digital AND physical games. So if you don;t fancy DD you can still get everything from other shops. If you like the convenience then its great too.
3) Because retailers could make money, they had no problems pushing a new format
4) Because the Vita is a new device, all the contracts drawn up for the games were made with DD in mind. As a result ALL Vita games have to be available to download from the PSN, if the publisher also wants a Cart version to put in retail stores they can also do that. We've already seen launch day games being discounted on the PSN down from £30 to about £15 I think, so it seems Sony realises that you can't keep a digital title at the same price forever because retail will cut the price within a few months.
The Vita does have it's own issues, sales have so far been sluggish, mostly attributed to the high price of entry. A similar problem befell the 3DS for it's first 5 months before Nintendo slashed the price and released key titles. Sony have prediced that they'll sell 10 million Vita's this year which is a solid number, but based on existing sales we have to expect something to happen in the next 9 months to make that happen, either a price cut or plenty of games. Probably both.
Further to that, the lacklustre response to the Vita, Sony's financial woes and the rise of phone/tablet gaming probably means this is the last handheld Sony will do.
To be fair, people were saying the same thing after the 3DS launch. Yet it still outsold the DS in it's first year because of the price drop and the key games. That's all anyone cares about. Make it affordable and release interesting games.