I don't think the PSP was doomed from launch at all. Rather I think for being Sony's first foray into the handheld market they did pretty good. (They sold over 60 Million PSPs... Which is not an insignificant number. Especially since, according to
PSuni no other competitor in the handheld market with Nintendo has been able to do that.)
They do need more games though, let's not deny that. (More AAA games like MGS: Peace Walker.) If they can start hammering out great games for the PSP/PSP2 then things will certainly look up for them.
Yes, they did make some fumbles. (The lack of a second analogue stick being one). But now if they improve on their fumbles on the PSP2 (which if the rumours are correct, then they may have...) Then I don't see a problem with the PSP, in fact it will likely become a real rival for the 3DS/Nintendo.