The full games are huge, I don't think they ever thought about that seriously.
I don't know, it's too soon to assume it's been completely canned, Nagoshi was still talking about it just a year ago and they've been kinda busy with the PS3/4, if all they wanted to do was a companion app they could have simply made a menu-based, well, app instead of porting the engine.
I say that because I get the suspicion that Vita might not be a thing anymore by the end of 2015. I don't mean that just in terms of North America, I mean globally. I don't see why Sega would want to invest in that anymore than they already have.