The lack of PSP software sales is apparently due to piracy figures for the console. Now while their might some truth in that statement I also believe it's due to lack of great quality titles. Strangely enough there are more PSP titles scoring over 80% on Gamespot reviews than DS titles. Just look at how the sales figures raised when God of War COA, Final Fantasy CC, Monter Hunter 2nd G and Patapon where released. This tells me that great quality titles equal good console sales (yeah pretty obvious).
Piracy however is something that has been plaguing the PSP for some time now although the same thing was present with the PS1 and PS2. Still today the PS2 however sells extremely well.